Chapter 8 Voluntary and Involuntary Dispositions & Replacement Property
Replacement rules apply to involuntary dispositions of all property which has
been lost, stolen, destroyed, expropriated, bankruptcy ( residential, business,
FROM THE IDEA TO THE BUSINESS PLAN
1. For ventures that first get to market or create intellectual property rights, its
common to price new products or services at high markups or profit margins.
2. Lifestyle firms are
EVALUATING FINANCIAL PERFORMANCE
1. Showing the relationships between two or more financial variable and/or
time, financial ratios are useful means of summarizing large amounts of
financial data for comparative purposes.
FINANCIAL PLANNING: SHORT TERM AND LONG TERM
1. The actions of screening business ideas, preparing a business plan, and
obtaining seed financing occurs during a ventures development stage.
2. Due to the difficulty of p
TYPES AND COSTS OF FINANCIAL CAPITAL
1. The accounting emphasis on accrued revenue and expenses and
depreciation is the same emphasis as that of finance managers.
2. Traditional accounting does not focus on the implici
VENTURE CAPITAL VALUATION METHODS
1. The venture capital valuation method estimates the ventures value by
projecting both intermediate and terminal/exit flows to investors.
2. Venture investors returns depend on the ve
VALUING EARLY-STAGE VENTURES
1. The valuation approach involving discounting present value cash flows for
risk and delay is called discounted cash flow (DCF).
2. The stepping stone year is the first year before the expl
OTHER FINANCING ALTERNATIVES
1. Despite the high risk and costs of using a facilitator or up-front fee solicitor
to obtain financing, many start-ups never-the-less seek them as a source of
funds due to the length of time
PROFESSIONAL VENTURE CAPITAL
1. In addition to having personal financial stakes in their portfolio of
investments, professional venture capitalists have raised funds from other
investors to invest in the portfolio.
SECURITY STRUCTURES AND DETERMINING ENTERPRISE VALUES
1. Preferred stock is the equity claim senior to common stock providing
preference on dividends but not liquidation proceeds.
2. For preferred noncumulative stock,
FINANCIALLY TROUBLED VENTURES: TURNAROUND
1. During the development, startup, and survival stages of a ventures life cycle,
the relevant financing and operating decisions faced are either restructuring or
HARVESTING THE BUSINESS VENTURE INVESTMENT
1. The process of exiting the privately held business venture to unlock the
owners investment value is known as harvesting.
2. When harvesting a venture, the methodical distri
SECURITIES LAW CONSIDERATIONS WHEN OBTAINING
1. The securities Exchange act of 1934 provides for the regulation of securities
exchanges and over-the-counter markets.
2. The Investment Company Act of 1
ORGANIZING AND FINANCING A NEW VENTURE
1. The difference between a limited partnership and a general partnership is
that the limited partnership has partners who actively manage the day-to-day
operations but also has pass
MEASURING FINANCIAL PERFORMANCE
1. Assets are financial and physical items controlled or owned by the business.
2. GAAP stands for General American Accounting Principles.
3. GAAP stands for Generally Accepted Accoun
Chapter 7 Capital Gains
Capital gains arise on the disposition of assets that were formerly producing either
business or property income
These are usually incidental to the business or property income they dont happen on a
regular or recurri
Canada will also tighten up eligibility for tax credits on medical costs, eliminating
credits for cosmetic surgery unless it's required for medical or reconstructive reasons
(Hodgson, 2010). Besides, according to the bulletin of Canada Revenue Agen
8. Which of the following tests are used by the courts in order to determine a taxpayers status as
an employee or a self-employed contractor?
A) Control test, ownership of tools test, chance of lawsuit, integration test
B) Control test
Chapter 5 Depreciable Property and Eligible Capital Property
Types of Capital Property
1. Non-depreciable capital property certain assets such as land, accounts
receivable, investments and personal use property
2. Depreciable Property property that wears
Chapter 2 Residence
A resident for tax purposes is not the same as a residence for
citizenship or immigration purposes
Residents of Canada must pay tax on their worldwide income
Individuals Common Law Concept
Residence is not defined in the ITA, CRAs inte
Chapter 3 Homework (September 20, 2011)
Problems # 1, 9, 10, 11 Discussed September 22, 23, 2011
Hand In Problem #13 Due Date September 27, 2011
Stock Option Plans Chapter 3
Stock options provide the holder the with options to purchase a
Introduction to Federal Taxation in Canada
The Canadian Tax System
Taxation influences the economy and affects earnings, spending
Impacts decisions made by individuals and businesses locally and
Deficits, taxpayer behavior, c
Chapter 4 Income or Loss from a Business ITA Division B, Subdivision B
What is Business Income Covered in ITA 9 37.3
These sections also cover property income, but there are differences in how
these two sources of income are calculated
ITA 248(1) Busine
Chapter 6 Income Attribution
o Process of shifting income is called income splitting
o Rules to avoid income splitting are called anti avoidance rules and attribution
Criteria used to Determine whether a Transaction has occurred at Arms Length:
Agent theory principal: agent acts on behalf of principal
(Walmart) Principal #7: venture character and reputation can be Assets or Liabilities
1. 3 financial statements: balance sheet, income statement, cash
Cost of goods so
INTRODUCTION AND OVERVIEW
1. Entrepreneurs provide the financing to individuals who think, reason,
and act to convert ideas into commercial opportunities and create
2. Entrepreneurship is the process of
Monitoring and Auditing AIS
What is cloud computing?
Utillty computing, saas provider page4
Define roles: SaaS user, Cloud user(E.g.small business), Cloud provider.