Which of the following is correct regarding CCA rates?
A)Capital cost allowance (CCA) rates are based on the declining balance for tax calculation.
B)Capital cost allowance (CCA) rates are based on the straight-line depreciation rates found in GAAP.
C)Capital cost allowance (CCA) rates are based on the SYD calculations.
D)Capital cost allowance (CCA) rates are based on strict rules found in IFRS.

Question

Quizplus · Accepted Answer

Capital cost allowance (CCA) rates are based on the declining balance method for tax calculation. This means that the percentage rate is applied to the undepreciated balance of the asset each year, resulting in a larger deduction in the early years of the asset's life and smaller deductions in later years. This method is used in Canada for tax purposes.

Which of the Following Is Correct Regarding CCA Rates