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Sir, could you please explain why in the example you subtracted $ 27000 from the selling company’s TNCA instead of only $ 9000 which would be the extra depreciation for the year when the PUP is divided by 4.
In chapter 8 example 3 you subtracted only the extra depreciation from the TNCA.
I understand that part of it. The Total PUP is subtracted from the RE and the extra depreciation from the TNCA. However, the extra depreciation is added back to the RE. So what is actually subtracted from the RE is the remainder after depreciation.
So why in this example have you subtracted the remainder from the TNCA and not the depreciation for the year.
Or is that I am getting confused because both the extra depreciation and the remaining pup were 5000 in chapter 8.“In chapter 8 example 3 you subtracted only the extra depreciation from the TNCA”
No I didn’t!
The pup was $10,000, the remaining useful life was 2 years so the depreciation for one year was $5,000 leaving the remaining net figure for pup of $5,000
In working W3 on page 168 I have deducted the gross pup of $10,000 and added back the excess depreciation of $5,000
On the TNCA line in the consolidated statement of financial position I have deducted from the $400 per question the $5 net pup. That $5 is NOT the excess depreciation
OK?
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