Money Market Withholding Tax – Net

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

IDDateDescription
J13-Feb-03Money Market Loan Start.
J228-Feb-03Withholding Tax Provision
J328-Feb-03Money Market Month End Accruals.
J41-Mar-03Reversal Money Market Month End Accruals.
J531-Mar-03Withholding Tax Provision
J631-Mar-03Money Market Month End Accruals.
J71-Apr-03Reversal Money Market Month End Accruals.
J83-Apr-03Money Market Loan Maturity.

J1                     Money Market Loan Start.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10013-Feb-03BCash at BankSGD1,000,000.000.567456USD567,456.38J1a
MMK10013-Feb-03BMMK-LoanSGD-1,000,000.000.567456USD-567,456.38J1b

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

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100128-Feb-03BWithholding Tax Provision - DRSGD364.940.568919USD207.62J2a
MMK100128-Feb-03BWithholding Tax Provision - CRSGD-364.940.568919USD-207.62J2b

Note J2b:          Calculation of Withholding Tax

Start date3-Feb-03
Month End Date28-Feb-03
Days (include 28-Feb)26= A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59= B
Total Interest8,281.34= C
Period Interest3,649.40D = C * A/B
10% Withholding Tax364.94= D * 10%

J3                     Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100128-Feb-03PMMK- Loan Interest ExpenseSGD3,649.400.568919USD2,076.21J3a
MMK100128-Feb-03BMMK- Loan Interest PayablesSGD-3,649.400.568919USD-2,076.21J3b
MMK100128-Feb-03BMMK - LoanSGD0.00USD-1,462.45J3c
MMK100128-Feb-03PFX - Unrealised Losses - CapitalSGD0.00USD1,462.45J3d

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 date3-Feb-03
Month End Date28-Feb-03
Days (include 28-Feb)26= A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59= B
Total Interest8,281.34= C
Period Interest3,649.40D = C * A/B

Note J3d:         The unrealised loss on the revaluation of the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.568919
568,918.83
At Start Date1,000,000.000.567456
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.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10011-Mar-03PMMK - Loan Interest ExpenseSGD-3,649.400.568919USD-2,076.21J4a
MMK10011-Mar-03BMMK - Loan Interest PayablesSGD3,649.400.568919USD2,076.21J4b
MMK10011-Mar-03BMMK - LoanSGD0.00USD1,462.45J4c
MMK10011-Mar-03PFX - Unrealised Losses-CapitalSGD0.00USD-1,462.45J4d

J5                     Withholding Tax Provision

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100131-Mar-03BWithholding Tax Provision - DRSGD435.120.577434USD251.25J5a
MMK100131-Mar-03BWithholding Tax Provision - CRSGD-435.120.577434USD-251.25J5b

Note J5b:          Calculation of Withholding Tax

Start date1-Mar-03
Month End Date31-Mar-03
Days (include 31-Mar)31= A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59= B
Total Interest8,281.34= C
Period Interest4,351.21D = C * A/B
10% Withholding Tax435.12= D * 10%

J6                    Money Market Month End Accruals.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK100131-Mar-03PMMK - Loan Interest ExpenseSGD8,000.620.577434USD4,619.83J6a
MMK100131-Mar-03BMMK - Loan Interest PayablesSGD-8,000.620.577434USD-4,619.83J6b
MMK100131-Mar-03BMMK - LoanSGD0.00USD-9,977.50J6c
MMK100131-Mar-03PFX - Unrealised Losses-CapitalSGD0.00USD9,977.50J6d

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 date3-Feb-03
Month End Date31-Mar-03
Days (include 31-Mar)57= A
Start date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59= B
Total Interest8,281.34=C
Period Interest8,000.62D = C * A/B

Note J6d:         The unrealised loss on the loan is analyzed as follows:

SGDRate+
USD
At Closing Rate1,000,000.000.577434
577,433.88
At Start Date1,000,000.000.567456
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.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10011-Apr-03PMMK - Loan Interest ExpenseSGD-8,000.620.577434USD-4,619.83J7a
MMK10011-Apr-03BMMK - Loan Interest PayablesSGD8,000.620.577434USD4,619.83J7b
MMK10011-Apr-03BMMK - LoanSGD0.00USD9,977.50J7c
MMK10011-Apr-03PFX - Unrealised Losses-CapitalSGD0.00USD-9,977.50J7d

J8                    Money Market Loan Maturity.

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
MMK10013-Apr-03PMMK - Loan Interest ExpenseSGD8,281.340.581416USD4,814.90J8a
MMK10013-Apr-03BMMK - LoanSGD1,000,000.000.567456USD567,456.38J8b
MMK10013-Apr-03BCash at BankSGD-1,008,281.340.581416USD-586,230.53J8c
MMK10013-Apr-03PFX - Realised Losses - CapitalSGD0.00USD13,959.25J8d
MMK10013-Apr-03BWithholding Tax Provision - DRSGD28.070.581416USD16.32J8e
MMK10013-Apr-03BWithholding Tax Provision - CRSGD-28.070.581416USD-16.32J8f

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:

SGDRate+
USD
At Closing Rate1,000,000.000.581416
581,415.63
At Start Date1,000,000.000.567456
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 Date1-Apr-03
Month End Date3-Apr-03
Days (include 3-Apr)2= A
Start Date3-Feb-03
Maturity Date3-Apr-03
Days (exclude 3-Apr)59= B
Total Interest8,281.34= C
Period Interest280.72D = C * A/B
10% Withholding Tax28.07= 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

DateUSD/SGDSGD/USD*
3-Feb-031.7622500.567456
28-Feb-031.7577200.568919
31-Mar-031.7318000.577434
3-Apr-031.7199400.581416

*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

CHANGE HISTORY

DateByChanges
26-Aug-2010CSCreation.
23-Jun-2016RJReformatted.
5-May-2020LTRe-formatting.
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