Accounting: Personal Finance

• Importance of keeping personal financial records
• Documents are stored away in a specific place, less likely to lose or misplace a document
• Advantages of personal filing

  • Help organise the important information concerning household financial affairs
  • To keep track of personal finances and hard to replace documents
  • Helps in payment documentation such as medical bills, insurance payments etc
  • Helps save time and money
• Setting up a record keeping system

  1. Gather all your financial documents

  2. Organise the records kept in the file

  3. Place appropriate records in a safe-deposit box or can be stored electronically
• Personal financial documents


  • Bills
  • Personal Cheque
  • Property Titles
  • Receipts
  • Tax Invoice
  • Credit Note
  • Pay slips
  • Bank Statements (Personal)
  • Electronic Fund Transfer at Point of Sale (EFTPOS)
  • Online Account Statements
• Electricity Bill


  A document sent by Electricity Authority to the customers on the usage of electricity
• Water Bill


  A document sent by Water Authority to the customers for the usage of water
• Personal Cheque


  Cheques drawn against funds deposited in your personal bank account
• Property Titles


  A formal document such as a deed that serves as evidence of ownership
• Receipts


  A document received by an individual when goods or services are bought for cash or when payment is made
• Tax Invoice


  A document received when the goods or services are bought on credit
• Credit Note


  Received by customers when goods are returned to the business
• Pay slips


  A slip given to an employee stating the gross pay, deductions and net pay
• Bank Statements (Personal)


  A record usually sent to the account holder once per month, summarising all transactions in an account
• Electronic Fund Transfer at Point of Sale (EFTPOS)


  A method of paying for goods or services without the need to carry cash. On making the payment the customer uses the EFTPOS card
• Online Account Statements


  Available online so that customers can view and print information anywhere anytime using the internet
• Online Banking


  Banking services where the customers can carry out various transactions over the internet rather than visiting a bank. Also known as "Internet Banking" or "Web Banking"
• Online Banking


  • Online security
  • Timely monitoring for accuracy
  • Scheduling bill payments and bank reconciliations
• Online Payment


  Making payments electronically with the use of internet, computer networks and credit cards
• Mobile Banking


  Customers are permitted by the banks to operate selected banking services which can be accessed over their mobile phones using SMS messaging
• ATM Services


  Automated Teller Machine is an electronic banking outlet, which enables customers to complete basic transactions without the aid of a teller
• Debit Card


  A plastic payment card that provides the cardholder electronic access to their bank account(s). E.g. bank card
• Credit Card


  Enables the holder to obtain credit up to the required limit from the issuer of the card for the purchase of goods and services
• Advantages of a Credit Card

  • Ability to buy goods or services without having sufficient cash
  • Convenient-purchases can be made by using the card rather than filling out a cheque
  • Safe - do not have to carry cash or a cheque book
  • Readily accepted-can use it anywhere even when you are out of the country as it is widely accepted
• Disadvantages of a Credit Card

  • The credit card can be costly at times when high interest rates are charged
  • Frequent usage of the credit card can increase the debt level as the monthly minimum payments will increase with the interest rates
  • It can lead to impulsive buying
• Schedule Bill Payments


  Timetabling of due dates for payment of bills so that it reminds one to make payments on time
• Transaction instruments


  Electronic devices used to carry out financial transactions. For instance; mobile phones, EFTPOS machine, ATM etc.
• Fringe Benefit Tax (FBT) is a tax levied at the rate of 20% on the fringe benefit taxable amount (non-cash benefits) of the employer for each quarter, with effect from 1 January, 2012
• Fringe Benefit


  Any non-cash benefits or benefits received in kind that is provided free by the employer to the employee (eg. housing, telephone, water, etc.)
• Categories of Fringe Benefits

  • Debt waiver fringe benefit
  • Household staff fringe benefit
  • Housing fringe benefit
  • Loan fringe benefit
  • Meal or refreshment fringe benefit
  • Motor vehicle fringe benefit
  • Private expenditure fringe benefit
  • Property fringe benefit
  • Residual fringe benefit
• Service Turnover Tax (STT) at the rate of 6% is imposed on the turnover of a person conducting a business involving the provision of a prescribed service where the annual gross turnover exceeds FJD 1.25 million
• Prescribed services subject to STT

  • Provision of accommodation, refreshments, and any other services by a hotel
• Certain capital gains may be subject to CGT of 10%
• Assets subject to Capital Gains Tax (CGT)

  • Real property, structural improvement or an interest in real property
  • Lease of real property
  • Yachts
  • Ship and Boats
  • A membership interest in a company, security or other financial asset
  • Intangible assets eg. goodwill
  • An interest in a partnership or trust
  • An airplane, helicopter or other aircraft
  • An option, right or other interest in an asset but does not include trading stock, or a business intangible
• Exempt Capital Gains

  • A capital gain made by a resident individual or Fiji citizen that does not exceed FJD$30,000
  • A capital gain made by a resident individual or a Fiji Citizen on disposal of either the individual's first residential property or principal place of residence
  • A capital gain made by a person on the disposal of shares listed on the South Pacific Stock Exchange
  • A capital gain made on disposal of an asset that is used solely to derive exempt income
  • Any gain made by a person on the disposal of an interest in a company within section 20 of the definition "company"
  • A capital gain made by a resident individual or a Fiji Citizen on disposal of his or her interest in a family home, provided that the disposal of the interest is by way of transfer to an existing joint tenant or tenant in common
  • A capital gain made by a resident person from the sale of shares where a private company goes through re-organization, restructure or amalgamation for the purposes of listing or as part of a listing process on the South Pacific Stock Exchange
  • A capital gain made by the trustee or beneficiary of a deceased estate on the disposal of an asset forming part of the estate
  • A capital gain made by a person on the disposal of shares if the shares were held by the person before 1" May 2011
• Deferral of Recognition of Capital Gain

  • Disposal of an asset between spouses (including a de-facto spouse) as part of a divorce settlement or under an agreement to live apart
  • Disposal of an asset by reason of the transmission of the asset on the death of a person to an executor or beneficiary of the person's estate
  • Transfer of a principal place of residence, first residential property, an interest in a capital asset, or shares in a company, by reason of love and affection between spouses (including a de-facto spouse), siblings, parents to children and vice versa, and grandchildren to grandparents and vice versa
  • Disposal of an asset by reason of loss, destruction or compulsory acquisition of the (referred to as the "replaced asset") if the consideration for the disposal is reinvested by the recipient in an asset of a like kind (referred to as a "replacement asset") within one year of the disposal or within such further period as the CEO allows
• Losalaini, a resident of Fiji, owns a house in Suva and she plans to sell it to Wing Chong on 2nd May 2014 for $100,000. Losalaini acquired the house on 1st January 2010 for $75,000. Calculate the gain or loss on disposal of asset? If there is a gain then calculate the Capital Gains Tax.
• Mr. Shick, a resident of Fiji, owns a house in Sigatoka and he plans to sell it to Mr. Willy on 2nd May 2014 for $250,000. Mr. Shick acquired the house on 1st January 2010 for $235,000. Calculate the gain or loss on disposal of asset? If there is a gain then calculate the Capital Gains Tax.
• Statement of Affairs


  A list of assets and liabilities to calculate net worth of an individual
• Some individuals hold traditional assets which can also be represented as assets in the statement of affairs. For instance, in an iTaukei culture mats, tabua, canoe, cattles can be regarded as traditional assets. On the other hand some of the traditional assets valued in Indian culture are jewelries, musical instruments etc.