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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Npv add back dep or tax saving
Hi
When do you add back dep and when you do a tax saving in the npv?
Thanks
Meant CASs not VAs
For Paper P4, you subtract the tax allowable depreciation to get the taxable profit, and then calculate the tax.
The current examiner does not then add back the depreciation. The reason is that he always assumes (and usually states in the question) that amount equal to the depreciation is needed to be spent on replacing the non-current assets.