Originally Posted by
Dave A
Yeah, and thinking about it maybe I should change my ways.
Unfortunately, strictly speaking it gets worse than what you have posted above.
Despite the allowance to expense 100% of the value in year one, this is for tax purposes only - one should still depreciate the asset over the useful life of the asset. The 100% allowance deduction should only applied to the tax computation. This gets further complicated with a deferred tax entry too - typically 28%* of the depreciation allowance portion not as yet claimed per the financial statements.
*based on current tax rates.
Did you like this article? Share it with your favourite social network.