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Hello,
I was wondering if someone could help explain the timings of tax allowable depreciation cash flows to me,
Based on how an exam question would be written how would you know to put the timing of the cash flow through in the same year or the following year? I thought it was normally t+1 unless it stated that it was claimed ASAP, I have seen a few questions that contradict this though,
Any help would be appreciated,
Many thanks,
if asset is bought at the begin.of the year (or if said nothing assume by default) = the same timing as Tax on operating flows. (always)
Easy: If said tax payable/occurs immediately – T1 (same for TA depn)
If said tax payable/occurs 1 year in arears – T2 (same for TA depn)If said asset bought during/at the end of the tax year. Look for the timings. Its sepparate headache. But does happen very rarely.
Good luck
Rustam
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