ACC 522 Chapter Notes - Chapter 6: Capital Expenditure, Capital Cost Allowance, Tax Deduction
Document Summary
Acc 522 chapter 6 notes: acquisition, use, and disposal of depreciable property. Depreciation/amortization: process of allocating the cost of a productive asset, over its useful life in order, to match its cost against the income that it helps generate, standardized for tax purposes. Wont be able to abuse the system. The process is difficult because it requires that the owner estimate three things with regard to the asset: useful life, 3. salvage value at the end of the useful life, and contribution to the business in each year of the year of the useful life. Process requires judgment: similar businesses acquiring similar assets may reach different estimates, lead to different incomes each of the years that the asset is used. Total cost deducted will be the same: maximum deducted cannot exceed the original cost of the asset. Example: each company purchases the same asset but the useful life is determined to be different.
