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Hi sir ,
I have watched the lecture and notes however am still confused.
Plz confirm whether my understanding is correct.
When purchase computer and AIA allowance if 500000 is used we put it in sla and x18%
However if there was nothing in AIA we put it in main pool and also x18% ?
ur clarification is highly appreciated.
If full 500000 of AIA is not used , so we put addition of computer in main pool? ****
I saw bpp kit starfish question amended 12/11. Putting computer in main pool .
Only if Computer is opted as a Short life Asset, then we allocate it to Special Rate Pool @ 8% if the election is not made then simple apply the AIA (available) or allocate it to the Main Pool @ 18%
Computers are in practice the most likely asset to be treated as a SLA but if of course AIA was claimed as it available for computers then no such SLA election would be available and there would be no residue of expenditure to go to the main pool.
In an exam question they should tell you the expected life of any asset for you to decide whether the SLA election is available and whether it should be made. If you are told that computers are short life then allocate AIA to other expenditure first and if that uses all the AIA then make the SLA election.
charuvinodvp – computers will never be allocated to special rate pool – either AIA will be taken or if not available !8% WDA will be claimed in the SLA working on the CA computation and then a balancing adjustment will arise on disposalOk I understood now.
So computer will be either AiA or SlA
But for starfish question in bpp kit amended 12/11 why did they put it in main pool??
I do not have the BPP kit but I assume the question is still dealing with losses on cessation of trading and the computer was both purchased and sold in the final period of trading. You should know that in the final period of trading there is no AIA, no WDA and no FYA but instead balancing adjustments are computed!
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