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I have doubts regarding how TAD is dealt with in Investment appraisal. With written down balance method, in the final year we subtract the residual value with the sale proceeds to get the balancing allowance or charge and if we aren’t given resale proceed we just bring the balancing allowance to 0. How do we deal with sale proceeds in straight line basis?
Do we add sales proceeds amt with the depreciation amt before deducting for balancing allowance or charge?
The difference between the sales proceeds and the carrying value (the depreciated value) gives rise to a balancing charge or a balancing allowance.
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