Case I deduction - provision
22/05/1997
Query
Whether a deduction due in resepect of a provision for a loss on a court case
Decision
In principle there is no statutory rule against charging a provision for a liability which has not materialised at the accounts date, provided such a provision will result in the accounts providing a true and fair view of the profits of the period and the amount of the provision can be estimated with reasonable accuracy. Where the claim includes a claim for a return of fees already earned, this aspect should be dealt with in the same manner as the rest of the claim.
Income Tax
Section 81, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT972004A