PURPOSE
To show illustration of money market withholding tax net.
OVERVIEW
i. Loan revalued to period end closing rate.
ii. No revaluation on interest expense.
iii. Withholding Tax Calculation based on net.
TRANSACTION DETAILS
| Accounting Base Ccy |
| Trade ID |
| Trade Date |
| Value Date |
| Maturity Date |
| Currency |
| Amount |
| Rate |
| Accrual Method |
| Total Interest |
| Maturity Amount |
| Withholding Tax |
| Withholding Tax Basis |
| USD |
| MMK1001 |
| 3-Feb-03 |
3-Feb-03 |
3-Apr-03 |
SGD |
| 1,000,000.00 |
5.1232% |
| Act/365 |
8,281.34 |
1,008,281.34 |
10% |
| Net |
SUMMARY OF JOURNALS
| ID | Date | Description |
|---|---|---|
| J1 | 3-Feb-03 | Money Market Loan Start. |
| J2 | 28-Feb-03 | Withholding Tax Provision |
| J3 | 28-Feb-03 | Money Market Month End Accruals. |
| J4 | 1-Mar-03 | Reversal Money Market Month End Accruals. |
| J5 | 31-Mar-03 | Withholding Tax Provision |
| J6 | 31-Mar-03 | Money Market Month End Accruals. |
| J7 | 1-Apr-03 | Reversal Money Market Month End Accruals. |
| J8 | 3-Apr-03 | Money Market Loan Maturity. |
J1 Money Market Loan Start.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 3-Feb-03 | B | Cash at Bank | SGD | 1,000,000.00 | 0.567456 | USD | 567,456.38 | J1a |
| MMK1001 | 3-Feb-03 | B | MMK-Loan | SGD | -1,000,000.00 | 0.567456 | USD | -567,456.38 | J1b |
Note J1a: The booking rate on 3-Feb 2003 is 1.76225 (multiplier 0.567456). The rate is rounded to 6dp for display. Full precision is used in calculation.
J2 Withholding Tax Provision
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 28-Feb-03 | B | Withholding Tax Provision - DR | SGD | 364.94 | 0.568919 | USD | 207.62 | J2a |
| MMK1001 | 28-Feb-03 | B | Withholding Tax Provision - CR | SGD | -364.94 | 0.568919 | USD | -207.62 | J2b |
Note J2b: Calculation of Withholding Tax
| Start date | 3-Feb-03 | |
| Month End Date | 28-Feb-03 | |
| Days (include 28-Feb) | 26 | = A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | = B |
| Total Interest | 8,281.34 | = C |
| Period Interest | 3,649.40 | D = C * A/B |
| 10% Withholding Tax | 364.94 | = D * 10% |
J3 Money Market Month End Accruals.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 28-Feb-03 | P | MMK- Loan Interest Expense | SGD | 3,649.40 | 0.568919 | USD | 2,076.21 | J3a |
| MMK1001 | 28-Feb-03 | B | MMK- Loan Interest Payables | SGD | -3,649.40 | 0.568919 | USD | -2,076.21 | J3b |
| MMK1001 | 28-Feb-03 | B | MMK - Loan | SGD | 0.00 | USD | -1,462.45 | J3c | |
| MMK1001 | 28-Feb-03 | P | FX - Unrealised Losses - Capital | SGD | 0.00 | USD | 1,462.45 | J3d |
Note J3a: The closing rate on 28-Feb-2003 is 1.75772 (multiplier 0.568919). The rate is rounded to 6dp for display. Full precision is used in calculation.
Note J3b: Calculation of Accrual in SGD
| Start date | 3-Feb-03 | |
| Month End Date | 28-Feb-03 | |
| Days (include 28-Feb) | 26 | = A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | = B |
| Total Interest | 8,281.34 | = C |
| Period Interest | 3,649.40 | D = C * A/B |
Note J3d: The unrealised loss on the revaluation of the loan is analyzed as follows:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.568919 | 568,918.83 |
| At Start Date | 1,000,000.00 | 0.567456 | 567,456.38 |
| Loss in exchange | -1,462.45 |
+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
J4 Reversal Money Market Month End Accruals.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 1-Mar-03 | P | MMK - Loan Interest Expense | SGD | -3,649.40 | 0.568919 | USD | -2,076.21 | J4a |
| MMK1001 | 1-Mar-03 | B | MMK - Loan Interest Payables | SGD | 3,649.40 | 0.568919 | USD | 2,076.21 | J4b |
| MMK1001 | 1-Mar-03 | B | MMK - Loan | SGD | 0.00 | USD | 1,462.45 | J4c | |
| MMK1001 | 1-Mar-03 | P | FX - Unrealised Losses-Capital | SGD | 0.00 | USD | -1,462.45 | J4d |
J5 Withholding Tax Provision
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 31-Mar-03 | B | Withholding Tax Provision - DR | SGD | 435.12 | 0.577434 | USD | 251.25 | J5a |
| MMK1001 | 31-Mar-03 | B | Withholding Tax Provision - CR | SGD | -435.12 | 0.577434 | USD | -251.25 | J5b |
Note J5b: Calculation of Withholding Tax
| Start date | 1-Mar-03 | |
| Month End Date | 31-Mar-03 | |
| Days (include 31-Mar) | 31 | = A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | = B |
| Total Interest | 8,281.34 | = C |
| Period Interest | 4,351.21 | D = C * A/B |
| 10% Withholding Tax | 435.12 | = D * 10% |
J6 Money Market Month End Accruals.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 31-Mar-03 | P | MMK - Loan Interest Expense | SGD | 8,000.62 | 0.577434 | USD | 4,619.83 | J6a |
| MMK1001 | 31-Mar-03 | B | MMK - Loan Interest Payables | SGD | -8,000.62 | 0.577434 | USD | -4,619.83 | J6b |
| MMK1001 | 31-Mar-03 | B | MMK - Loan | SGD | 0.00 | USD | -9,977.50 | J6c | |
| MMK1001 | 31-Mar-03 | P | FX - Unrealised Losses-Capital | SGD | 0.00 | USD | 9,977.50 | J6d |
Note J6a: The closing rate on 31-Mar-2003 is 1.73180 (multiplier 0.577434). The rate is rounded to 6dp for display. Full precision is used in calculation.
Note J6b: Calculation of Accrual in SGD
| Start date | 3-Feb-03 | |
| Month End Date | 31-Mar-03 | |
| Days (include 31-Mar) | 57 | = A |
| Start date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | = B |
| Total Interest | 8,281.34 | =C |
| Period Interest | 8,000.62 | D = C * A/B |
Note J6d: The unrealised loss on the loan is analyzed as follows:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.577434 | 577,433.88 |
| At Start Date | 1,000,000.00 | 0.567456 | 567,456.38 |
| Loss in exchange | -9,977.50 |
+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
J7 Reversal Money Market Month End Accruals.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 1-Apr-03 | P | MMK - Loan Interest Expense | SGD | -8,000.62 | 0.577434 | USD | -4,619.83 | J7a |
| MMK1001 | 1-Apr-03 | B | MMK - Loan Interest Payables | SGD | 8,000.62 | 0.577434 | USD | 4,619.83 | J7b |
| MMK1001 | 1-Apr-03 | B | MMK - Loan | SGD | 0.00 | USD | 9,977.50 | J7c | |
| MMK1001 | 1-Apr-03 | P | FX - Unrealised Losses-Capital | SGD | 0.00 | USD | -9,977.50 | J7d |
J8 Money Market Loan Maturity.
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| MMK1001 | 3-Apr-03 | P | MMK - Loan Interest Expense | SGD | 8,281.34 | 0.581416 | USD | 4,814.90 | J8a |
| MMK1001 | 3-Apr-03 | B | MMK - Loan | SGD | 1,000,000.00 | 0.567456 | USD | 567,456.38 | J8b |
| MMK1001 | 3-Apr-03 | B | Cash at Bank | SGD | -1,008,281.34 | 0.581416 | USD | -586,230.53 | J8c |
| MMK1001 | 3-Apr-03 | P | FX - Realised Losses - Capital | SGD | 0.00 | USD | 13,959.25 | J8d | |
| MMK1001 | 3-Apr-03 | B | Withholding Tax Provision - DR | SGD | 28.07 | 0.581416 | USD | 16.32 | J8e |
| MMK1001 | 3-Apr-03 | B | Withholding Tax Provision - CR | SGD | -28.07 | 0.581416 | USD | -16.32 | J8f |
Note J8a: The closing rate on 3-Apr-2003 is 1.71994 (multiplier 0.581416). The rate is rounded to 6dp for display. Full precision is used in calculation.
Note J8d: The realised loss on the loan is analyzed as follows:
| SGD | Rate+ | USD |
|
| At Closing Rate | 1,000,000.00 | 0.581416 | 581,415.63 |
| At Start Date | 1,000,000.00 | 0.567456 | 567,456.38 |
| Loss in exchange | -13,959.25 |
+ Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
Note J8f: Calculation of Withholding Tax
| Start Date | 1-Apr-03 | |
| Month End Date | 3-Apr-03 | |
| Days (include 3-Apr) | 2 | = A |
| Start Date | 3-Feb-03 | |
| Maturity Date | 3-Apr-03 | |
| Days (exclude 3-Apr) | 59 | = B |
| Total Interest | 8,281.34 | = C |
| Period Interest | 280.72 | D = C * A/B |
| 10% Withholding Tax | 28.07 | = D * 10% |
EXCHANGE RATES
Our illustration assumes the company uses different daily exchange rates for accounting.
The following rates were used for this illustration.
Spot rate
| Date | USD/SGD | SGD/USD* |
| 3-Feb-03 | 1.762250 | 0.567456 |
| 28-Feb-03 | 1.757720 | 0.568919 |
| 31-Mar-03 | 1.731800 | 0.577434 |
| 3-Apr-03 | 1.719940 | 0.581416 |
*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
FREQUENTLY ASKED QUESTIONS
RELATED INFORMATION
CHANGE HISTORY
| Date | By | Changes |
|---|---|---|
| 26-Aug-2010 | CS | Creation. |
| 23-Jun-2016 | RJ | Reformatted. |
| 5-May-2020 | LT | Re-formatting. |
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