COMM-3016EL Chapter Notes - Chapter 11A: Book Value, Capital Cost Allowance, Capital Asset
27 Mar 2018
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Capital cost allowance (cca) method the method used in calculating depreciation for tax purposes and calculating the tax value of an asset by canadian businesses, regardless of the method used for reporting. Since companies use this for method for tax purposes, some particularly small businesses also use it for financial reporting, judging that the benefits of keeping 2 sets of records are less than the costs of doing this. Income tax act identifies several different classes of assets and the maximum cca rate for each class. To determine which class a particular asset falls into, it is necessary to examine the definition of each asset class and the examples given in this act: Most buildings acquired after 1987, including component parts such as plumbing, elevators, and sprinkler systems. Property or equipment not included in other specified classes. Automotive equipment, such as motor vehicles and passenger vehicles (unless they meet class 10. 1 conditions)
