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On page 209 and 211 of ACCA F9 BPP textbook, there are a project concerning trade-in value of a machine to value its effective in the perspectives of lessee and lessor. In term of lessee, the value of trade-in at the end of useful life of the machine has to bear a tax payment to calculate the effective of the project. However, in term of lessor, there are no tax payment on the value of the machine at the end of useful life to calculate the effective of the project. Please explain more for me about the tax on trade-in value.
Thank you!The lessee owns the machine and therefore it is the lessee who suffers tax in the normal way the tax is calculated when assets are owned (as I go through in the free lectures).
The lessor does not own the asset and therefore the only tax effect is the tax saved on the lease payments (as, again, I show in the free lectures).
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