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Sir,
If the asset is bought at the end of the year(last date), do we charge the depreciation for the whole year(same year) and claim the tax allowance next year?Or we charge the depreciation the in next year and the claim tax allowance the following?
It depends on whether tax is payable immediately or with a one year delay.
If you watch the free lectures on investment appraisal with tax, then I do explain in detail how to deal with the tax. (We usually assume assets are bought at the start of an accounting period. It is only in lease and buy questions that often the asset is bought at the end of an accounting period – again, this is explained in detail in the lectures on lease and buy).
Our lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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