Construction Industry Scheme (CIS) Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractorâs payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractorâs tax and National Insurance. Contractors must register for the scheme.
Depreciation and Amortization. Not all G&A expenses represent cash leaving the company. Depreciation and amortization expenses are a result of the matching principle of accounting. This principle tells us that we should match the costs of producing revenue to the period when the revenue is produced.
Amortization expense is found on the income statement and lowers net income. The cash flow statement is done in two ways -- the direct and indirect methods. In the direct method, amortization expense does not show up on the cash flow statement. The indirect method adds back non-cash items to net income. Therefore, amortization expense is found on the cash flow statements done by the indirect method.