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Hello Sir,
I hope you are doing well.
I’m doing a capital allowance question form BPP study text (Saruman page 400 if you have it).
In the question there were disposal and additions of items. The disposal took place first (the dates are given). I went about listing them according to the chronological order weather addition or disposal.
In the answer, BPP listed some items of the additions first, then the disposals, then another item of the addition which I found very confusing.
Please advice me on whether or not there is a particular order I should go about when listing additions and disposals in a Capital Allowances question.
Thank you in advance.
You never simply list out transactions on a chronological basis! That statement suggests to me that you have not worked though the OT course notes or lectures on this most important area and that is what you must do first!!
I don’t have the BPP material and there are different approaches that can be taken but the approach in the OT course notes and the approach used in the ACCA exam answers is to firstly deal with additions that rank for AIA and claim the AIA, followed by those that rank for only WDA (cars other than low emission). Disposals are then brought into the computation and WDA is then claimed on the pool(s) balances. Finally any additions eligible for FYA are listed (low emission cars) and the FYA is claimed.
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