RSM324H1 Chapter 6: CHAPTER 6-1

• School: UTSG
• Department: Rotman Commerce
• Course: RSM324H1
• Professor: Abraham Iqbal

Document Summary

Chapter 6 the acquisition, use, and disposal of depreciable property. No deduction from business income for any expenditure of a capital nature and, as well, the deduction of depreciation and amortization. Accounting amortization/depreciation is disallowed, and a uniform and arbitrary allocation of the asset"s (cid:272)ost is i(cid:373)posed for tax purposes. The result is that all (cid:271)usi(cid:374)esses ha(cid:448)e si(cid:373)ilar results relating to the purchase of similar assets. The uniform system divides capital assets into 2 general categories: depreciable capital property: includes primarily tangible assets, such as equipment. The allo(cid:272)atio(cid:374) of the (cid:272)apital (cid:272)ost of the asset is gi(cid:448)e(cid:374) the ter(cid:373) (cid:862)(cid:272)apital (cid:272)ost allo(cid:449)a(cid:374)(cid:272)e(cid:863) (cid:894)cca(cid:895: eligible capital property: includes only intangible assets, such as purchased goodwill, incorporation costs, and unlimited life franchises and licences. Standard format: starts with opening balance, then adds additional purchases and deducts any disposals, applied appropriate cca rate to obtain deduction for tax purposes for the current year. Cca on a number of different types of assets.