Hi John, if i recall correctly, reducing line basis does not take into account residual value. Then why do we deduct 4 million at the year 4 to get the 0.5million tax allowable depreciation?
i know 4 million is stated in the question but we do not take into account residual value for the reducing line basis isn't ?
Ask the Tutor ACCA AFM
BURUNG CO ( JUNE 2014)
7y ago#1It is reducing balance basis (not reducing line basis :-) ).
The sale proceeds are not taken into account when calculating the TAD for each year except the final year. In the final year there is a balancing allowance or balancing charge.
You post under another question today says that you have now watched the Paper PM lectures on this, and so I assume that you will not be clear about it :-)
Sign in to reply to this topic.