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Dear Tutor,
Please comment if my below understanding is correct or am I lost:-Rollover:If I dispose of a qualifying asset ( regardless of depreciating or non depreciating asset) and reinvest the amount in a non depreciating asset, which again I dispose off then the gain will keep on rolling until the final disposal when the amount is not being reinvested any further.
Hold over:If I dispose off a qualifying asset ( regardless of depreciating or non depreciating asset) and reinvest the amount in non depreciating asset. I sell the new asset before 10years of acquisition then the holdover gain will crystalise regardless if I reinvest the sale proceed in another depreciating asset. However, if we reinvest in a non-depreciating asset then we will have a rollover.
Regards.
Situation 1 – Yes
Situation 2 – did you actually mean to say “reinvest in a depreciating asset”?
I would also add that for your own benefit you would be far better off acquiring a good working knowledge on all syllabus items rather than continually posing “but what if” questions on specific individual issues that will not impact on whether you pass or fail this exam.Yes I meant depreciating asset. Do consider my apologies for consistently asking such questions. I have always been a curious student and my point of enrolling for ACCA was not just to pass the exam but rather gain a clear understanding. I understand that such questions on a frequent basis may annoy you and may also lead to over burden of information in my head. I appreciate your wise advise.
Thanks.
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