How would the base cost calc work for this scenario ?
A CC in the service industry sold part of its operations for R750,000 in 2012
Fixed assets acquired before Oct 2001 @ cost R200,000
Accumulated profit of R200,000
Member loan account of R400,000 CR
The operations started in 1999, so the business is 14 yrs old. So then the value as at OCT 2001 must be deducted (base cost) ?
1999 - 2001 (3 yrs proportion of R750 000 total value) = R 160 714
Remaining gains accumulated to sales date = R 589 286
Is this how it works ?