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- This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
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- March 17, 2017 at 9:03 am #378532
In December 20X5, Mighty IT Co revalued its corporate headquarters. Prior to the revaluation, the carrying amount of the
building was $2m and it was revalued to $2·5m.
Mighty IT Co also revalued a sales office on the same date. The office had been purchased for $500,000 earlier in the
year, but subsequent discovery of defects reduced its value to $400,000. No depreciation had been charged on the sales
office and any impairment loss is allowable for tax purposes.
Mighty It Co’s income tax rate is 30%.thanks for your previous help mike
can u just tell me what is the carrying value, tax base and taxable difference of the sale office pls
March 17, 2017 at 9:57 am #378535also, how will this be possible – One way or another, that original cost of $500,000 will be allowed against the profits for tax purposes
March 17, 2017 at 9:58 am #378536$400,000. $500,000. $100,000
OK?
March 17, 2017 at 10:02 am #378537Why would it not be possible?
$100,000 is allowable straight away as an impairment
The remaining $400,000 will be allowable by way of capital allowances
OK?
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