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- This topic has 5 replies, 2 voices, and was last updated 8 years ago by
John Moffat.
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- May 22, 2015 at 9:44 pm #247998
Hi tutor,
Please explain how we will treat the situation if it is written
Depreciation expense for the last year was $6.2m and was calculated on reducing balance basis of 25% per year. This matches what is allowable for tax purposes.
What will be the tax allowable depreciation in the next year?
Kindly elaborate
ThanksMay 22, 2015 at 10:15 pm #248005And I want to ask that is index calculation is part of p4 syllabus
If so then please direct me to an online lecture
ThanksMay 23, 2015 at 8:44 am #248063If depreciation was 6.2M then the written down value before charging it must have been 6.2M / 25% = 24.8M.
So the written down value after charging it would be 24.8M – 6.2M = 18.6MTherefore next years depreciation is 18.6 x 25% = 4.65M
May 23, 2015 at 8:46 am #248064It depends what you mean by index calculation!
If you are meaning price indices, then calculation of them would certainly not be asked but I suppose they could be relevant somewhere (they are assumed knowledge from Paper F2).
If you want a lecture on them, then you can find one in the Paper F2 lectures.
May 24, 2015 at 9:27 am #248289Thank you so much for your help
May 24, 2015 at 11:01 am #248361You are welcome 🙂
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