Let us go into the details of the core parts of IMS and we start with the proxy CSCF. In the overall architecture the core IMS starts with the proxy call session control function. It means that the user equipment, a mobile phone, a tablet or a laptop starts to communicate with PCSCF to interact subsequently with other nodes. It is interesting, just realize that the relationship or interaction between the proxy call session control function and the serving call session control function is one on one. However, the most important element that we will discuss later, the serving call session control function has many interactions with other nodes. It means the proxy call session control function is mainly responsible to get the user equipment through to the IP multimedia subsystem. So we say that it is the first contact point of the user equipment with IMS. Since this is proxy, it can be considered analogous to the SIP proxy. We haven't gone into detail on how exactly SIP protocol works, but for gravity I'll say here that session initiation protocol is all about establishing, managing and terminating voice and video calls. Since this is an ITF standard, it had to be adopted under a different framework and brand or NGN. Let's get back to the proxy CSCF. The proxy CSCF interacts with admission control subsystem to authorize the media components. These media components can only be admitted as long as a certain level of quality of service can be provisioned. While doing so, the proxy CSCF does not alter the request initiated by the user agent. It means it is not authorized to modify the SIP message for initiating the session. Since it is a node, so it has to be recognized by the user equipment, for that an IP address is allotted or assigned to the proxy CSCF by the service provider. And since the user equipment is coming from the access network, so at the time of configuration it could be pre-configured user equipment or it could be user equipment being configured while it makes a request to establish the connection. So it means the user equipment would recognize a proxy CSCF through its IP address. Other features related to the proxy CSCF include that proxy CSCF may even act as a user agent. It means under abnormal or unusual conditions such as a user equipment enters into a mobile network and leaves the mobile network into a no coverage area. In that case, the proxy CSCF may act as a user agent itself. It means it can generate SIP transactions that is SIP messages and it can terminate SIP messages like an endpoint, though we know that the endpoint is supposed to be the user equipment. But since the user equipment is not available, so it has to act on behalf of the user equipment. So this is an abnormal situation that can also be handled by the proxy CSCF. proxy CSCF has additional role of providing end-to-end security association between the IMS and the user equipment. It means that all the SIP sessions which would be established between the user equipment and IMS would now be encrypted and the communication would remain confidential. The physical location of proxy CSCF is typically in a home network, but if a user is roaming, it can leave its home network and enter into a foreign network or a visited network. In that case, the proxy CSCF has to be there in both these networks. From the user perspective, it has to have an entry point into the IMS. Let's quickly have a look at it again. Here we see that on the leftmost bottom side, the user equipment enters into the IMS interaction for associating first for security and then for exchanging SIP messages through the proxy CSCF.


RCR with Paul Brennan, Reality Check Radio. So here is the statement released by DemocracyNZ last night, Sunday evening. On behalf of the Board of DemocracyNZ, we make the following statement. DemocracyNZ was formed in March, 2022 on the fundamental principles of democracy, unity, and equality. We stand for freedom, for family, and for farming. During the course of the past 10 months, we have announced a number of candidates. These candidates have come from a wide range of backgrounds and skills. Yesterday, referring to Saturday, the Board of DemocracyNZ addressed an ongoing issue with a candidate who was unhappy with board decisions and governance of the party in general. This is not something we take lightly, but the decision as a board was unanimous. As a consequence, four other candidates have chosen to resign. We thank Steve Cranston, Kirsten Murphy, Lee Smith, Matt Shelton, and Bill Dyatt for their contributions and wish them the very best for the future. They go on to say, we understand this might be an unsettling and confusing time for some, but it's not uncommon to have candidates decide to depart from a party before an election. We remain strong, united, committed, and focused on the mission we embarked on when we started this party, which is to fight for our country and restore democracy in a fair and reasonable manner. We will contest the 2023 general election in October of this year. We have talented and dedicated candidates running in seats around the country who have continued to pledge their support for democracy in Zed and will continue to work hard for the very reasons our party's mission states. We thank you for your support regards Matt King, Party Leader and Danny Sims, Party President. So that's what we know at this time, Monday morning. Of course, Matt King has been a guest on this program not too long ago, and many of you fed back to us what you thought about that. So we thought we'd try and delve into with what we know so far what is going on here. With Cameron Slater, Cameron, welcome back to RCR. Good morning, Paul. Okay, you just heard that statement. What sort of statement is that? Well, it's a nothing statement other than to say that they've got ructions in there amongst their membership so much so that five candidates had ones been sacked and four have bailed out in support. And this is just a classic Monty Python-esque type situation, where you've got the people's front of Judea and then you've got the splitters that have gone in another direction. And this is what you're seeing here. But I mean, just reading into this, you know, he's saying, you know, it's a common thing for candidates to depart before an election. No, it's not, Matt. It's just not. There's not one candidate either. It's five. It's five candidates that have disappeared. So what we're reading here is, and we haven't seen what any of these people have said out there. There's rumors and innuendo and all of those things. But let's just deal with reality here. Five people aren't happy with how one person perhaps has been treated. And they're clearly not happy with what's been going on with decisions and governance of the party in general. This is all classic small party stuff that happens all the time. I think it was the impression among many that this was a viable option and, you know, it had a growing energy behind it. And it was a party that people were considering. But it turns out on the basis of this, behind the scenes, very fragile, just about to fall apart even. The people who think that Democracy New Zealand is a viable option for the election are addicted to Hopium, right? They are hoping that things will come right. They're hoping that the media will give them a fair chance. They're hoping that Matt King can win in Northland. They're hoping that they can get 5%. And there's no plans to do any of that. I've spoken to Matt King about this. I said, you know, what are your plans to do two things? First thing is, what's your plan to win in Northland? And his answer to me was, well, I just know I will because I was the candidate before. You know, when I was, you know, I won it before. And he utterly believes and is convinced that his boyish good looks is wit and charm that got him across the line in Northland when in actual fact it was because he was a member of the National Party. No other reason. You know, and you've got a four-way competition up there. Willow Jean Prime is quite popular apparently from what I can gather on the ground. You've got Shane Jones who's looking to, you know, carve off some of those disillusioned National Party people and people who've voted for Labour in the past that can't bring themselves to vote National. You've got the ACT candidates having a good old scrap up there as well. And then you've got Matt King. Now, what we need someone to do is to actually do a poll up there, a lot like the poll that was done in Auckland Council elections for the mayor. We had all these centre-right candidates. Somebody did a poll, showed that Wayne Brown was gonna win and made the others all pull out and quit. That's what needs to happen in order for somebody to get across the line that's not the National Party or the Labour Party in Northland. But no one seems to be willing to cough up the five grand or whatever it costs for a poll to do that. Okay, let's say that happened. Who is the likely recipient of those who would be prepared to move in the face of that information knowing that it's just not gonna happen if you're a Democracy NZ supporter or a Matt King supporter? Well, I mean, theoretically, people who believe in democracy and freedom and all of those things that they talk about, freedom, family and farming. Theoretically, it should be the ACT Party. But David Seymour destroyed his freedom credentials with his behaviour over the Wellington protests. The only person who can really benefit from this would be New Zealand First and Winston Peters. He's saying the right things. He's doing the right things at the moment. And the reality is he is the only small party that has a chance of getting over 5% in the next election. And that's not pushing Winston's Barrow or anything. I'm just dealing with reality. Everything else is hope. And I love that term because people who support all these minor... I mean, you saw yesterday on the nation or on TVNZ, whichever it was, the guy from Top going on about how grand they are. And you've had a couple of media people pushing Top's agenda in with their columns, et cetera. But Top is only scoring a half of 1%. They're not even realistic as a party that's gonna get across the line. So there's still a lot of people out there who are still believing that hope is gonna get them there. And it isn't gonna get you there. Hard work is gonna get you there. A plan is gonna get you there. And I'm yet to see a plan from Democracy New Zealand or from Mat King or anybody associated with them on how they're gonna, first of all, win a seat and secondly, get 5%. That's 150,000 votes. They're just, you know, you've got a whole lot of small parties that are all competing for that 150,000 votes to get to 5%. They're never gonna work together. As I said, this is a Monty Python-esque situation. We've got splitters and splitters of splitters.   It rhymes me, you know, really clearly of the Libertarian Party, Libertarian's Party that ceased to exist when they could no longer muster a quorum in a phone box.   And, you know, if we look at the MMP year, we've had 27 years or nearly 30 years of MMP and only two people have quit their parties held a by-election and won. And those are Tariana Turia and Winston Peters.  They didn't actually stand by their principles and take it to the voters as soon as they quit. The old party, those two did and they won. But there's only two. Everybody else has disappeared from New Zealand politics. What you've just said sounds kind of logical and common sense to someone like me. And given the times we're in and the urgency that many people feel, how do you explain that lack of common sense amongst the players at the moment?  That's a 101 for projecting a party image, particularly for an election. It's obvious. And still, obviously, some can't put away the ego or put away the purity for the bigger or the greater good or the bigger cause. But there never is a greater good or a cause, the cause. I'm involved in the firearms community. There's 250,000 firearms license holders. And everybody says, well, we've got a big voting block here and that we can all change the impact of the election. We can really affect some things. But they never do because they're not organized. They haven't got a plan. There's no single representative group for firearms owners. In the United States, they've got the NRA. And when they say they're gonna hurt somebody at the ballot box, they go sit about and do it. But nobody's said they're gonna do that here. And that's a huge block of voters. But that huge block of voters is filled with people who will support New Zealand First, who will support the ACT Party. There's a good chunk that support the ACT Party. But David Seymour arrogantly assumes that he's got those votes forever. So there'll be some of them like me that are saying, well, I don't want anything to do with David Seymour because when I talked to him about what he was gonna do for firearms owners, he said he's not gonna do anything for them. And then you have to take the manager's word. He's not gonna do anything for them. So we've got another situation. We've got the so-called freedom movement, which isn't actually a freedom movement. It's not a movement as such. There's no leaders of it. There's no, you know, there's no cohesion. There's no central organized sort of thing. There's a whole bunch of people who've got particular agendas. They might be anti-vaccines. They might be anti-mandates. They might be totally, you know, wanting an anarchy type situation where there's no politicians involved and we just get on with each other. And then you've got a whole bunch of other people who are on the periphery of all of that. But there's no cohesive argument. There's no cohesive group that's putting them all together. There's so many disparate groups.  You know, so you haven't got an environment where everyone's gonna work together. And again, you're dealing with hoping. Everyone hopes that they're gonna work together because if you put it all together, they might get 5%. But there isn't a plan for that. And it's only 16 weeks to the election. It's not gonna happen. It's just not gonna happen. I mean, the reality is, when it comes to third parties getting across the line at the next election, you know, it's a given that the AK party will get across the line. The greens, they're slipping and marginal. And, you know, frankly, they're not focused on the environment anymore and they're focused on their hard version of communism and, you know, increases taxes and expanding the size of the state and all of those sorts of things. So they're diluted. They're the small part. The Maori party will, should get a couple of seats.  Which means that New Zealand first is the one that's likely to get across the line. Winston actually went to the Wellington protest and spoke to protestors. He refused to speak to the media when he was there. He made it quite clear that he was there to talk to the protestors, to understand what they were on about. And he's also had an epiphany about some of the things that happened after 2017, especially around the vaccine mandates and those sorts of things. And he realizes that, you know, based on the information they had at the time, they did what was necessary, but they should have changed that when new information came to light. And now he's very definitely saying, no, we should have let people have choices and we should never have had mandates. I mean, you should never have done these, these have damaged society. And the other thing that he's also talking about is that we need to have one class of citizen, not this polarization that's happening, the segregation that's happening in society that Jacinda Ardern started and Christopher Hipkins is continuing. So I think he's got a lot of things that he can touch on that a lot of people have disquiet over. They're not confident that someone as wet and woke as Christopher Luxon is going to be able to act as a ball walk against, you know, these globalist type people. He's very definitely a globalist. He's very definitely wet. He's very definitely woke. Winston is the person who's saying, no, we're not having this wet and woke rubbish in our society. And, you know, he'll bring some sensibility to government, I think. If you were advising Matt King right now with all you know, and some of what you've said just here right now, what would that advice be in the aftermath of that? What my advice to Matt King would be to go and get a poll in Northland.  So the only hope, and they really are living on Hopium, democracy, New Zealand supporters. The only hope is that Matt King could win in Northland and the only way he's gonna gauge that is to get one of his donors, whatever's left of them, to pay for a poll and actually deal with reality instead of Hopium. Cameron Slater, thank you. And we'll see you again, if not before, who knows for next political panel this coming Friday. Thank you. Thank you very much. RCR with Paul Brennan, Reality Check Radio.


Good evening everybody. I'm Aditya. I'll be giving the presentation for our project Open PLC that was done under the Integrated Development Lab. So the main objective of our project was to was to develop an industrial compatible open source PLC using open source technologies such as so that it's simple, cost-effective, helpful for students and easy to program. Conventional PLCs are costly and they're not really open source. So if students, if anyone wants to get a feel of how to work with it, they won't be able to. So this PLC is basically developed with the aim in order to help students get a feel of our project. So this is the second iteration of our PLC. The first iteration was done previously before us. So here we've made a lot of changes on our second iteration. So these are the improvements that we've done in our second iteration. So these are some of the improvements that we've made in our second iteration. So we've included Forte Runtime Environment, which is an open source application deployment software. We've also made a transition from ladder programming to functional block diagrams. We've migrated from IEC 61131 standards to IEC 61499 standards. And since we've replaced ATMEGA 16A microcontroller with the Raspberry Pi 0, now that we have a Raspberry Pi 0, we have the luxury of operating with it remotely. So we've also incorporated headless mode of operation. Our project has three major parts, which are the hardware development, firmware and Linux development and application development. I'll speak in a brief about all these parts. The hardware part basically involves creating PCB designs for our project. All of these were done from scratch. And we tested it using breadboards and then we migrated it to PCB boards using KiCAD. So these are some of the pictures of our PLC. This is the baseboard of our PLC in which you can see the inputs and output terminals. This is the top board with the baseboard. And while designing the PLC, we also took into consideration the form factor of the PLC. You can see that it's extremely compact and it could be fit under this box. Now coming to the firmware and Linux development, the main objective of this part was to make sure that there is seamless interfacing of devices with the PLC and the communication between them was smooth. So these are some of the work that was done. Moving on to the application development, here the main task was to convert existing ladder programs into functional block diagrams. We've also made a learning curve for students who wish to convert to functional block diagrams. So learning curve for students for using even an FBRT blocks. Even an FBRT blocks are some blocks present in the FODAC environment which is an open-source software. And we've also implemented MQTT protocol. So now we'll have a demo of an application that we've developed to give an example of how much our PLC can do. We'll now have the demonstration of cruise control system. This cruise control system is basically to show what the PLC can do. So yeah. What is a cruise control system? Cruise control system is basically a running car and whenever you switch on the cruise control system at whatever speed you are running at it will maintain the same speed. The basic mechanism working with it is whenever you've switched it on suppose you're at 50 kilometer per hour it will take it 50 kilometer per hour is set. Now if the speed increases or decreases by any chance the pedals will move automatically. There will be an actuator below the pedals. It will move automatically to bring the things down, pressing the pedals of accelerator or brake. So that is what we are going to demonstrate. This is the cruise control application that I have already deployed on the PLC. Now I would like to show how this works using a GUI. As you can see this is the it resembles a dashboard of a car. That is a start stop button just to start or stop the cruise control. It shows the status of the cruise control. It's right now it's off. The present speed it is showing 53 because we have switched it on and we have not switched it off again so it's showing 53. Anyways steering wheel position. Okay we have something known as a steering wheel here. I don't know if you can see this or not. It's it is kind of a joystick. So if you rotate it like if you move it after a particular level I have set it after 4,000. If it goes after 4,000 then it will come out of the cruise control system. Like the start stop will go to the left again and the cruise control will become off. Next thing the accelerator and the pedal. Okay what happens is when I manually press that accelerator or pedal then also the cruise control it will come out of the cruise control system. Now let me start it. This one is moving and the speed is changing 51, 55, 52. Right now if I start the cruise control. Okay now the speed is set at 51. When the speed increases above 51 the break and accelerator pedal becomes like this. Okay please. Now I have increased the speed till 70, 65 but my set speed is 51. So my break pedal has been pressed to decrease the speed of this system but because we have not put any actuators here to actually decrease the speed that's why the speed is not decreasing. That can be done only when we use our actual car to show this. Okay now we are decreasing the speed up to 29. 27, 28 but the speed is set at 51. So the accelerator pedal has been pressed. Okay and then what we do is this is the steering wheel let me just move it a little bit. See this is increasing or decreasing. Okay now what he what he did was he entirely pressed it that's why it went out of the cruise control system as you can see. We didn't do anything it automatically went to went to off. Now I'll switch it on again. Okay now again my speed is set is 37. Now I will manually press this pedal. Accelerator pedal and as you can see it has again stopped and now no matter if I increase or decrease the speed these pedals won't move because it is no more in the cruise control system. So this is just a demonstration of what our PLC can do. This is not our entire project our entire project is this PLC board that we have designed the one we have configured and we have also done many applications we have converted many existing applications that were written in bladder diagram into function blocks and we have we are complying with 614 double-line standards right now. So that's it. So this is a slide of our project timeline. So the first two weeks we had we dedicated it entirely for to get familiarized with the environments and the softwares that we were going to be using in the next few weeks and in the next few weeks from week three to week six we had distributed our work and we worked separately and one of us worked on the hardware implementation the other worked on the Linux and development part and while the other one worked on the application development part in the last two weeks we basically combined all these all these different parts of the project to make the final PLC. Now moving on to the future scope these are some of the future scopes of the project so right now the hardware is not compatible with the IEC 614 double-line standard so in the future iterations we could probably improve the hardware such that it is complying with the standard and also here when we when we calculated the speed the speed was actually transferred to the Node-RED program using MQTT protocol. The MQTT protocol that we've used here was not secure so we could make that secure and developing SCADA solutions. We don't have any SCADA solutions as of now so that could be included and writing more interfaces for more peripherals and sensors so hope you like the presentation thank you


All right, so we got us a new heat call here, another one. So it just kicked on, just kicked on. She said it comes on, tries for a bit and stops. So let's take a look and see if we can figure out what's going on with this thing. It's got the ECM drive for the draft motor. It's got the newer igniter, and we're not seeing any glow. So let's see what kind of code ends up giving us. Show this to be another simple one. 31 pressure switch. Pressure switch did not close or open. All right, so do we have a plugged up condensate trap? Let's take a look and see. It's usually that or possibly something in these exhaust stacks, which are looking pretty unhealthy to say the least. They're kind of looking a little bit tired there. Holy mackerel. And they're really far apart. And look at that coming in. It's really nice. Let's see if we can plug that up for the lady. Get the chair out. Well, it's not plugged. That's a good thing. You can see that pulling as hard as it can. Kind of curious when you go outside, maybe check the exhaust stacks. Ink the box here and see how she responds. Could be something in our pressure switches too. So I had water in this not too long ago on a different furnace. Not the case with this one. But like I mentioned on another video, it was one that had a bit of fire. And they had made a vent around where the kind of seat traps at. And it drove the water right back into the furnace. Filled it all up. Not good. So let's take a look in here. All right, so we got that up going there. Took the cover off and she's running. So we probably have an air intake issue. Pretty good. So I just put the cover on there and you can watch the flames start to come back at me. So maybe you go outside and check the exhaust stacks. See what's going on out there. I don't know how that's not leaking. Oh, it's an air intake. So they've cut this a few times before for some reason. That's probably, there's probably a reason for that, I betcha. Let's go outside and take a look. Just doing a little basic investigation here and stuff. So let's go out there and look and see what we got. What I'm doing here is just, these videos are for the new guys, just so you know. I'm talking out loud so you guys hear what my thought process is.  I do more than just residential. For some reason, the residential stuff's getting a lot more hits than what my commercial stuff, refrigeration, things like that.  Let's go outside. Oh, this is great. She brought my snow boots. This is pretty deep. That's pretty deep. You can't, there, there you go. It's up to my knee. Yeah, this is great. Let's walk around here and see if we can get to it.  Oh yeah, look at that. So the exhaust was angled downwards, which shouldn't have been. The air intake's over there in the snow. I guess somebody didn't glue it.  There's a reason why she had daylight coming in. So there must have been another furnace here before. It's the best thing I can come up with. The, yeah, they just should have never done it like that.  That's just causing a hellacious amount of recirculation potentially. It should have came out right next door with each other, right close together. But unfortunately they didn't do it, so we're just gonna have to make the best we can of it. Probably have to yank that out and see if we can knock the snow out of it. All right, this looks about ratty. I glued it, actually used cleaner when like the last people. And I'm not happy with that at all. Really, I'm not. I think what I'm gonna do, since they've got it the way they've got it, I'd love to come out a new hole, but that would be bad.  It looks like hell on the outside, but it's hidden behind that air conditioner. There's no good way. I don't know why.  This is one of the judgment calls. What do you do? All right, so we checked the filter, it's fine. I'm gonna go pick up some new pipe and get that replaced. Otherwise it's gonna come out of glue again. Got the cover on there. It's running fine. Clean the flame sensor when we get back. So right now, let's go get those parts and kind of start from there, but right now we've got it running.  I just, I always wanna fix everything.  I put the cleaner on there, but you can see it's not. That's not good. All right, so we went and got some pipe and I'm kind of experimenting here. Now we could bring that thing up higher, but she said I could run it over, but we don't really have that many issues with recirculation, I guess, with the carriers. So I mean, you can kind of do one of those numbers or we could do a T on the end. I guess what bothers me is the lady saying that she's getting some sort of wind causing an issue with it tripping out. Myself personally, I'd like to see it come up higher and just shoot straight out. Let's see if we make this thing look a little bit better. Maybe if they were a little closer to the house instead of hanging out like as far as what they're hanging out. I really don't like them out that far. It's quite a bit. Looks kind of ugly. Yeah, there's that there. And even when we do it like that, doesn't hardly come out that far to even hit it. I'm gonna go inside, get this thing glued so I can get that set up right. All right, it looks a lot better for what we got to work with. I mean, you got a hands distance there. Had about two hands difference here. So it's no wonder why it looks a little crooked. But at least it's properly glued and clean prior to. I assume they couldn't go any further over because they'd hit the floor joist there. Sometimes you can only polish it so far and then you just gotta make it work. Honestly, I think this looks a little better. I mean, they're hidden. When you come over this way, it's hidden. It's where you can't see it. And that's pretty typical right there. I mean, she said I could run it horizontal but then I'd put me in front of the strain and all that stuff and I'd have to worry about what's gonna keep it from falling down and then I'd have to put clamps on the wall and that just turns into a mess. I'm gonna leave it like this and then worst case scenario, if they need to, they could always add that to it. But I don't think they're gonna need to do that. I'll, I might just leave that as a little extra but that kind of cleans it up and it's kind of hidden back there.   It just is unusual. Seems like it should work out fine. If you don't like it, that's all right. It's in the book like this. Welcome to Ohio weather where it's deeper snow. So any other time you may have been able to come straight out and just let it go straight out, but that's right at that 12 inch mark and that's probably more like 14. But with it being in a corner like this, it could go up higher and cause an issue. This is in the backyard. So like I said, you can't even see them from anywhere else. I went ahead and flipped that around the other direction to kind of separate it out a little bit but you can see possibly the exhaust is only reaching out to about here and it's not like it's going to hit directly and pinch right onto it. All right. So we went ahead and glued the top of that pipe there but the bottom right here, this is not glued. This is not glued and that's not glued. So depending on what it causes any issues for, we'll be able to modify it without having to chop pipes and all that stuff. As you can tell, I brought this thing closer to the house now instead of way out front. And I still gotta grab some caulk and seal that thing up for so it doesn't have anything getting into the house from there. All I had was clear, at least it's sealed and won't be having infiltration and then the insulation will block the backside so you don't have a little light coming through making you think there's a hole there.


It's freezing cold outside and there's snow on the ground, but I'm glowing and it's not because of the woolly jumper I'm wearing or the fact that we've got our central heating on full blast, but it's because Pangea, a global village, has become a reality. And I would like to pass my congratulations to all of the people who have been involved in this venture from the initial concept through the planning stages and now the management of the conference which is about to take place. I have huge respect for all of you. Most people think that schools are places where children learn and of course that's true but it's also somewhere where teachers learn and I'm sure that the next few days will reinforce that belief. We all have moments of frustration, especially when things outside our control get in the way of us being able to fulfill our dreams and our aspirations, but in over 50 years of working in the education sector I haven't come across anybody who is fundamentally pessimistic. So the panel discussions are going to give you the opportunity to share ideas, to give each other support, to realise you're not alone and to come away with new perspectives, looking at things in a different light and I hope with a great renewed sense of hope. The students, well there's no need to worry about them because they always bounce back with every challenge that you give to them. So I'm sure like me you're all really excited to see what comes out of the cross-cultural stories, to see how young people from very different backgrounds and experiences and circumstances translate to their music in different ways and also how they interpret those feelings and put them into their individual pieces of art. So there's a great programme lined up, again huge congratulations to everybody, really looking forward to it and let's all remember all of us who take part to think about the theme of the conference, which is compassion and collaboration.


Hello and welcome to this session in which we will discuss the business interest expense limitation. What is the big idea of this business interest expense limitation is to limit the deduction of interest expense for C corporation. So the first thing we need to know is this limitation applies only to C corporation. And what's the purpose of it? The purpose of it is to curb the deduction of interest expense. Why? Interest expense is a form of financing. That's fine. You borrow money, you pay interest on it. Nothing wrong with this. Except interest expense is tax deductible. So what the government is saying, that's a great, you can deduct it.  So the Tax Cuts and Jobs Act of 2017 introduced this limitation on interest expense deduction, whether that interest expense is paid or accrued. And this restriction, as I just mentioned, applies to C corporation. So what is the deduction limited to? So how much would they limit to? They limit you to the sum of those following. Well, taxpayer business income, they limit you to that plus sum plus the sum. So that amount plus 30% of the taxpayer adjusted taxable income, which we're going to see what adjusted taxable income is in a moment, plus the taxpayer floor planning financing interest for the year. What is the floor planning financing interest? It's how much it's costing you to finance your inventory. A good example will be auto dealers. Auto dealers, the majority of auto dealers. When you see those cars in a parking lot at auto dealers, well, the dealer paid for this. Yes, but they usually borrow money to do that. That's a lot of money. No one will have millions and millions of dollars sitting in the bank. And they have to pay interest on that. Well, the majority of auto dealers obtained their inventory through that commonly referred to as the floor plan, floor plan financing, which is secured by the inventory itself, because whoever gives you the money, usually the bank, they look at the cars as collateral. Well, interest on this type of that floor planning is fully deductible without any limitation because you are trying to obtain inventory. Now the risk is the risk in this business interest expense is when you try to finance yourself through that. That's what they're trying to avoid. Finance your company through that. But if you're financing your inventory, that's part of your business. That's fine. Now, how do we compute adjusted taxable income? Before we proceed any further, I have a public announcement about my company, farhatlectures.com. Farhat accounting lectures is a supplemental educational tool that's going to help you with your CPA exam preparation as well as your accounting courses. My CPA material is aligned with your CPA review course such as Becker, Roger, Wiley, Gleam, Miles. My accounting courses are aligned with your accounting courses broken down by chapter and topics. My resources consist of lectures, multiple choice questions, true-false questions, as well as exercises. Go ahead, start your free trial today. Well, adjusted taxable income is taxable income computed before you take into account any non-business income. So you don't take into account any non-business income gains deduction. So non-business, it means non-business. It's not business related. Any business interest in business income. So you don't take into account the interest because the whole thing is about the interest deduction. You don't take into account NOL because net operating loss deduction is usually coming from the prior year. You don't include this. You don't include any qualified business income deduction, which is usually doesn't apply for C corporation, just only agricultural and horticultural, which is not really relevant. And any deduction allowed for depreciation, amortization, and depletion. I'm sure you learned in your financial accounting course earning before interest and taxes, this EBIT, okay. Sometimes they call it earning before depreciation, EBIT earning before depreciation, interest, and taxes. Simply put, this adjusted taxable income is earning before any type of interest income or interest expense. So you have to take out both expense and income. Any depreciation, amortization, or depletion, any NOL, any non-business activity. So simply put, they're focusing on your taxable income from the business for that particular year without taking into account interest and depreciation. What happened if you have unused interest expense? So you are limited. You are limited to a certain amount. So what happened to that amount that you cannot take? Well, any disallowed amount can be carried forward and utilized in future tax year. However, this limitation don't apply to small businesses. So small business exception, if you're considered a small business, and let's consider the small business for our purpose, well, if the taxpayer average gross receipts for the prior three years is a certain number. For 2023, it's 29 million. For future years, it will be much higher. So just as long as you are a small business exception, I happen to give you the number here because just for illustration, this number could be different in future years. So if you qualify for the small business exception, you don't have to worry about this limitation. In other words, you can take all of your interest expense. Let's take a look at a couple examples to see how this works. In 2023, Adam, a C corporation with a calendar year report 2.1 million of adjusted taxable income. Adam earns 80,000 of interest income. This is interest income. They have some sort of an investment and they earn interest income and incurred 1 million in interest expense. That's the expense. They don't have any floor planning. How much can Adam take in interest expense? Well, what's the formula? The formula is you are limited to interest income, which happens to be 80 percent, the sum of your interest income, plus 30 percent of your adjusted taxable income. We're going to, 30 percent is 2.1 million times 30 percent. We're going to assume that this is the proper adjusted taxable income, not including whatever we talked about in the prior session. Therefore, if we total those, you are limited to 710,000. However, you paid a million dollars. Well, if that's the case, you have an excess of 290,000. It cannot be deducted this year, but it cannot be deducted in future years. Carry forward and treat it as a business interest expense in future years. Now, bear in mind, if Adam was considered a small business, that amount is fully deductible and that amount is 1 million will be fully deductible. Let's assume Adam's adjustable taxable income was 5 rather than 2.1 million. Well, if that's the case, the full amount is deductible. Why? Because if you take 5 million times 30 percent, that's going to give you 1.5 million. Well, 1.5 million is greater than the interest expense. Well, that's good because now you have more income. Your interest expense is lesser than 30 percent of your income. That's fine. You're making enough money. We would allow you to deduct that interest expense. Let's take a look at an example where we have a negative adjusted taxable income, which is basically operating at a loss. Assume NOAA, a C corporation, adjusts the taxable income a loss of, this is a loss of 2 million. NOAA earns $50,000 in interest income, no floor planning, and incurred 200,000 in interest expense. What is NOAA's interest expense deduction limited to? Well, you're going to be limited to under those circumstances to your interest income, which is 50,000. You cannot take the loss of 2 million and multiply it by 30 percent. It's a loss. That's fine. You can do that. So you're limited to that. And the remaining, which is 150,000, will be carried to future years when you have earnings and you can deduct this. Let's assume NOAA qualifies as a small business. If that's the case, go ahead, go for it, but full 200,000 is deductible. So in this session, we looked at the limitation for the business interest expense deduction. What should you do now? Go to Farhat Lectures, look at additional resources, MCQs, true, false lectures that's going to help you understand this concept better. Study hard, good luck, and of course, stay safe.