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Hi, I didn’t understand your explanation in the lecture about the last part of this chapter about the replacement asset being a “non-depreciating asset”. Can you please explain it in a bit more detail here? And what does the word crystallize mean in this context?
Roll over is supposed to work when you sell and then buy a non-depreciating asset – ie – one that goes up in value rather than down – normally a building.
So a deprecating asset would be plant and machinery etc.
The gain you roll over into the new asset then crystalises or becomes payable when the replacement non-depreciating asset is sold.
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