INCORPORATED ACCOUNTANTS
AUDITORS AND E.P.T. CREDITS Ai the annual meeting of the Society of Incorporated Accountants held at Incorporated Accountants' Hall, London, yesterday, the president, Mr. Percy Toothill, delivered his address There would be regret in the accountancy profession, he said, that the Finance Bill had done nothing to remove the serious anomalies associated with the assessment of E.P.T. The Chancellor of the Exchequer had re- minded them that the too per cent. rate was introduced to take the profit out of war. That was generally recognised, but the -adjustment of incon- sistencies would not conflict with that sound principle and the rectification of anomalies would stimulate war production. It was satisfactory, how- ever, that the Finance Bill appeared to clarify the conditions relating to the 20 per cent. repayment From the viewpoint of accountants, however, the suggested new provisions were still obscure, and it might be felt that it would be unwise to include amongst the assets of companies sums which might later be repayable under them provisions. Fol these reasons it would probably be preferred to insert a uote on the balance-sheet in general terms, with a specific reference to this future right to repayment, the application of which still remained to be laid down by Statute, except that the amount would clearly not be distributable either as dividend or bonus shares. Some companies were precluded, for security reasons, from disclosing their profits before taxation, and it would probably not be desirable in many cases to insert any definite estimate of the E.P.T. repayable. The omission of such vital information from the accounts was to be regretted, but there appeared to be no other available course.
THE FUNCTIONS OF FINANCE IN WARTIME The past twelve months, Mr. Toothill continued, had witnessed extensions of the two main function of wartime finance; the restriction of unneces- sary personal expenditure and the provision of means for the maximum war production. On the whole, the first function by means of ever- increasing taxation and stricter rationing, had worked fairly well although further restriction on personal expenditure was necessary. But the second function had been less successfully explored, and it was probable that our financial resources were not yet fully deployed. It was a strange anomaly that the ability of a company to expand its vital war production depended not entirely on the need for that production but on the accidental factor of the amount of its profits for the Smart 1935-37, in relation to E.P.T. This position was, however, remedied to some extent by the special finan- cial arrangements with the Ministry of Supply.
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