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I just did did the ACCA new bbn practice test online and I need some clarification.
Asura began self employment on 1 July 2018 and prepared accounts to 5 April 2019. Nine months.
She purchased a laptop for 2600 in June 2018.
I understand that the laptop will qualify for capital allowance and AIA but what I dont understand is why the ACCA answer gives the full 2600 for allowance when the accounts were prepared for nine months.
She also bought a car which did not qualify for FYA and it was time apportioned. Why not the laptop?
In another question on Tenth Limited the company ceased trading on 31July 2018. That was 4 months into the trading period .It had been trading for years .
The main pool TWV at 1 April 2015 was 12400. On 3 June 2018 Tenth limited purchased a laptop for 1800.
On 31 July the laptop was sold for 1300 and the main pool assets for 28200.
The problem I have is that the ACCA answer doesn’t calculate any capital allowance on the main pool between 1 April 16- 1 April 18. That is 3 years.
They simply added the laptop then did the disposals . I dont get that. I thought capital allowance were yearly.
I’m not sure if it’s a mistake since the practice tests are based on past papers updated for the tax year.
There i as also a capital gain included for a office buildings sold from 2015. The company ceased trading in 2018 so how can that be included. The scenario did not state that the profits were rolled over. Not sure if this is a mistake either as the indexation fiven is for December 2017 when the building was sold in 2015.
Oh. I just remembered. The AIA amount should be apportioned not the asset amount. So 2000000×9/12= 150000
Correct – it is the AIA limit of 200K that is apportioned, whereas the WDA on the car is time apportioned. If a car had been eligible for FYA then again NO time apportionment.
Re the cessation – yes a CA computation is performed for each chargeable accounting period, so I can only imagine that as you suggest it is an updating error – that the tax wdv b/f should be at 1 April 2018 – as there is no AIA, WDA or FYA in the final period then we simply add in any acquisitions and deduct disposals to compute a balancing adjustment
Once again with the building it must be an updating error as we would only include a chargeable gain that arose within the chargeable accounting period, which from what you have written is the 4 months to 31 July 2018 – can only assume it must have been purchased in 2015 and hence the IA to December 2017
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