How Is the Company's Tax Bill Affected by Capital Cost

question 82

Essay

How is the company's tax bill affected by capital cost allowance (CCA) and how does this affect project value?

---

Definitions:

Future Liability

A financial obligation or debt that a company is required to pay at a future date.

Income Tax Expense

The total amount of income tax a company is required to pay to the government, reflected as an expense in its income statement.

Deferred Tax Asset Valuation Allowance

A contra-asset account used to decrease the value of deferred tax assets if it is more likely than not they will not be realized.