Outrageously Funny Word Dictionary :: Disallowance

👉 In accounting, a disallowance is an adjustment to a financial statement that prevents a previously recognized expense from being reflected in the statement. It occurs when an expense or gain is realized but not recorded due to an incorrect classification of the transaction. For example, if a company sells a product for $10,000 and realizes a profit of $8,000, it would be considered a disallowance because the profit should have been recorded as an expense. However, since

disallowances

👉 Disallowance refers to a legal principle that allows an individual or organization to be exempt from paying certain taxes, fees, or penalties. It is often used in situations where an entity has been found not to have met its obligations under tax laws, regulations, or other relevant standards. The purpose of disallowance is to encourage compliance and transparency by providing a mechanism for individuals or organizations that are not meeting their tax obligations to avoid the need for additional financial penalties.

disallowance