6. Foreign investment appraisal – Example 4

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May 5, 2020 at 11:21 am #570016
michaelt000
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Why maintenance expenses not tax deductible when calculating tax.
May 5, 2020 at 4:15 pm #570047
John Moffat
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I have absolutely no idea as to which book you found the example in !!

If you will be more specific then I will try and answer.
May 6, 2020 at 4:13 pm #570180
michaelt000
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My apologies, I was referring to Example 4 on page 40 of the opentuition AFM notes and the answer given on ACCA (AFM) lectures – Discounted cash flow techniques (part 3).

The question stated

“An amount equal to the amount of the tax allowable depreciation is required each
year for the maintenance of non-current assets.”

Why it’s the maintenance taken as a deductible expenses to calculate tax?
May 7, 2020 at 10:11 am #570214
John Moffat
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You have a valid point in that the expenses would probably be allowable for tax.

However as I do explain the free lecture working through this example, this is something that the current examiner regularly puts in questions and he always ignores any tax implication.
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