Unit 14 of OT lectures
Example 1
Capital allowances: 25% reducing balance
How is this calculated?
Ask the Tutor ACCA APM
NPV
3y ago#1Let' say item cost 1200.
First year's A = 25% x 1200 = 300. WDV of item = 1200 - 300 = 900
Second year's CA = 25% x 900 = 225. WDV of item = 900 - 225 = 675
and so on.
Like depreciation on a WDV basis.
For the last year the balancing charge or allowan e is the Cash proceeds - b/f WDV
Sign into reply to this topic.