The ACCA Learning Community
Home
294 online now

cost of machine is $160000 payable start of year 1.?in which year cost is recorded....?year1 or year 0?

+1 Vote
cost of machine is $160000 payable start of year 1.?in which year cost is recorded....?year1 or year 0?

?and which year capital allownce and tax benifit treatment?

April 2nd 2015 AN ACCA USER 130 Points 1 Flag

3 Replies

0 Votes

SHould be in Year 0

April 3rd 2015 AN ACCA USER 140 Points
0 Votes

Cost should be recorded in year 0 while capital allowance and tax benefit treatments start in year 2.

April 4th 2015 AN ACCA USER 250 Points
0 Votes

When dealing with cash flows, initial relevant investments are assumed to happen at the beginning of year 1, which as correctly stated in the two previous responses, is year 0. In terms of the SOFP under NCA's, the recognition will effectively be at the end of year 1 at it's NBV.

April 20th 2015 AN ACCA USER 200 Points
...