Page 131 - P6 Slide - Taxation - Lecture Day 1
P. 131
Solution
• The R1m reduces the base cost of the machine.
Base cost:
Cost R3 500 000
Allowance (2015 @ 40%) (1 400 000)
Allowance (2016 @ 20%) ( 700 000)
Base cost before reduction 1 400 000
Reduction amount (1 000 000)
New base cost 400 000
• If reduction amount was more than 1 400 000 then
balance would’ve been dealt with ito section 19.
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