REVERSED SURPLUS EARNINGS MAY BE DEDUCTIBLE FROM UNDISTRIBUTED SURPLUS

01/01/2002

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In a ruling issued on 25 September 2001, the MOF stated that where an enterprise intends to use capital surplus arising from the revaluation of fixed assets, wasted assets or intangible assets, or from adjustments in the book value of land, to make up losses, the amounts lawfully reversed from earnings to capital surplus in the following year in which such earnings arise will henceforth be admissible as deductible items when calcu-lating undistributed retained earnings under Ar-ticle 66-9 of the Income Tax Law.