Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
This wholoe discussion is nothing new. many Governments, including the UK have allowed for accelerated tax depreciation, or 100% tax write off in the year of investment, and this does not have to be reflected in the asset register. Instead, you can record a liability for tax refund repayment in the balance sheet, which is amortised, cash less, over the economic life of the investment.

The whole point of this kind of incentive is to make it attractive within a certain time window to make an investment, threby bringing investment forward.

having reclaimed 100 % tax credit on the investment in year one, you are unable in subsequent years to use the accounting depreciation on that specific asset to offset corporate tax, so you future marginal tax rate increases.

by senilebiker on Sat Jan 29th, 2011 at 07:48:45 AM EST
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