good work mate, we are indebted to you.

you are the best man

please Sir in the carrying amount ,you were using the reducing method. please its the reducing balance affecting the carrying amount too? i only see it to affect that of the tax because it was stated 25% capital allowances on reducing balances.thanks

Thank you

Nice lecturer

Perfect content man!

thanks

Thank you for this!!!

@youjustgotburned3980

3 жыл бұрын

Where is 75% coming from

@fahimsalik70

3 жыл бұрын

@@youjustgotburned3980 reducing balance TB is 25% so instead of doing: 150k*0.25 = 37.5k, 150k - 37.5k = 112.5k (CV) He simplified it by doing: 150k*0.75 = 112.5k

why the residual value is not taken into account when calculating the reducing balance method?

@opentuition

2 жыл бұрын

Because it is impossible to know in advance what the residual value will be (and therefore companies could invent figures so as to get different allowances). That is why for tax purposes it is only taken into account when the asset is actually sold.

@counterleo

7 ай бұрын

You can never go to zero with reducing balance, there will always be something left, unless you are reducing by 100%. In both FA and FR you are told to ignore residual values for the reducing balance method, you apply the percentage to the whole carrying amount. Truth is the percentage given in the question is cleverly designed so that after applying it over the years you should magically end up at the residual value. Handy, because it can act as a check during the exam. Except in this specific question: 150000*(0.75)^6 = 26,696, ok that's kind of close to 30,000 but still a big rounding difference :D

If the closing DTL Balance is greater than the opening DTL and therefore results in a negative number, does this reverse itself and become a differed tax asset?

@opentuition

Жыл бұрын

Our tutors do not monitor posts here. If you want out tutor to reply then please post in the free Ask the Tutor Forum on our website - our tutor will always reply to questions posted there 🙂

@toddgilbey3979

Жыл бұрын

@@opentuition I know that, sometimes another commenter answers on here.

@opentuition

Жыл бұрын

@@toddgilbey3979 True :-)

@toddgilbey3979

Жыл бұрын

@@opentuitionSorry for the short reply, 😊

@counterleo

7 ай бұрын

It's been 1 year, I hope you cleared your exam, but I'll answer If closing liability is greater than opening liability then your number is positive, you became "more liable" during that year... See 12:24 it's C - O gives positive. I'll assume you meant what if opening liability is greater than closing liability... Then you become "less liable" during the year, as if you basically paid off your virtual debt a little bit, but you are still indebted. In effect you will reduce your tax *EXPENSE* in the *SPL* but you still have an overall liability, just smaller, in your SOFP. You will recognise a tax asset only if the CARRYING AMOUNT of the asset is LOWER than its TAX BASE. You will find that out in the step 2. Only after you go on with step 3, and do that table at 12:24, and calculate the movement. If you have an asset at closing and had a liability at opening of year, you can invite your wife to the restaurant because you are going to be recognising some profit.

Where does the 75% come from

@belvinthomas8976

3 жыл бұрын

Calculate either 25% and deduct that amount or calculate 75% and use that amount directly. Eg: asset value 100, depreciation 25% . Calculate asset value?. Answer- 100*75% = 75 or 100*25% = 25 , therfore 100-25 = 75. Hope you got it!!!