Dear Tutor,
In the subject example, suppose cost of 10hectares of land 26,000, ST sold 2hects for 16000. The ramining 8 hects valued at 34000. However, if ST incurred lets say 2000 as incidental sales cost, then how do we calculate the chargeable gain?
Is it going to be as follows:-
Since GROSS proceed from disposal is 16000,
Allowable cost = 26000 X (16000/ 16000+34000) = 8320.
Chargeable gain = 16000 - 8320 - 2000(i.e. incidental cost) = 5,680.
Or is it going to be something else?
Ask the Tutor ACCA TX-UK
Partial disposal of asset (Eg 9, page 81)
yes you do a normal gains calculation deducting selling expenses from SP and then use the part disposal calculation to compute the allowable cost to then be deducted
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