Canadian Eligible Capital Deduction Pool Accounting
How do you make the 25% non-deductible portion of an intangible asset purchase disappear without expensing it so it is shown on the balance sheet and tracked?
I.E. The corporation buys a URL for $2,000.00 (now intangible tucows v renner Ontario). However only 75% is put in the CEPD pool on schedule 10 of the T2. Where do you put the other 25%?
It can't be expensed. If recorded as any form of liability then it is eventually still expensed ... or callable debt instead of ...? How do you show shareholders you spent $2000 but only $1500 counts towards assets?
I don't really give tax preparation assistance on this site. This is a site about bookkeeping for small business owners who work from home.
Having said that, I'm not really up on the cumulative eligible capital deduction on Schedule 10 ... but without doing any kind of research, I'd say you are confusing financial reporting and tax reporting
I did a post a while back on CCA and deferred tax (see the link above) where I chatted about the difference between financial reporting and tax reporting.
I'm fairly certain your tax return software will handle the 75/25 allocation which is totally separate from the bookkeeping entry in your accounting software.
If you think about your financial statements, meals and enterainment are only 50% deductible on your tax return but you record 100% of the expense in your accounting records.
Please don't take my word on this. Follow up with your accountant to be sure.P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.