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Sir,
If a question states “TAD will be granted on a straight-line basis, and any residual value will be taxable”, shouldn’t we calculate the balancing allowance or charge?
KAPLAN study text (Sep 2021 – Jun 2022) chapter 3 test your understanding 5 – introductory question (118pg)’s answer (123pg) doesn’t calculate the balancing allowance or charge?
Thank you.
I do not have the Kaplan study text and so cannot see the actual question (and I have never seen that wording use in actual exam questions).
However, if the TAD is calculated straight line on the original cost, the balancing charge will be the residual value and so stating that the residual value will be taxable is having exactly the same effect.
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