Is the nature of the gainor loss considered ordinary or long-term?

Q: The difference between book value of the asset with the proceeds receive from its sale, with result…

A: Assets:   It refers to the economic value of all resources owned by the business at a given point in…

Q: How will we recognise any fair value gain arising from a change in fair value of an investment…

A: Investment Property:   An investment property is a property in the form of land or building that are…

Q: practice, would you expect the depreciation expense for a non-current asset to be overestimated or…

A: Depreciation is charged for non current asset being tangible asset, because of its wearing and tear…

Q: When should a property be sold?

A: Sale of property: The act of transferring the title to the buyer by the seller after receiving the…

Q: What is residual value or salvage value? Why and how is it calculated in accounting?

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: n of a

A: Definition of an Asset Improvement A capital improvement is a large investment that improves a…

Q: Why might the actual holding period for a property be different from the holding period that was…

A: The consideration while anticipating holding period: 1.The rental from the property. 2.The rate at…

Q: re for impairment loss assets, what will happen/effect?

A: Impairment Recognition Business assets should be tested for impairment when a situation occurs that…

Q: How does Leasing offer protection against the risk of declining asset values?

A: Leasing:    The term leasing defines that it is a process of renting a property to someone the…

Q: fair value model for investment property differ from the revaluation model for PPE

A: Fair value model and revaluation model are methods of valuation of non-current assets as per…

Q: Do I have to include depreciation when computing net present value?

A: Depreciation is said to be none cash expense so there is no out flow of cash when depreciation…

Q: The gains are commonly known as depreciation recapture. True or false?

A: Depreciation Recapture means a procedure adopted by USA Internal Revenue Service to collect taxes on…

Q: In what circumstance would a property insurance claim be rejected?

A: An insurance claim is a written request for coverage or compensation from an insurance company for a…

Q: Obligations for which the amount of the future sacrifice is so uncertain that it cannot be measured…

A: Obligations for which the amount of the future sacrifice is so uncertain that it cannot be measured…

Q: Are litigation costs to defend an intangible asset capitalized or expensed? Explain your answer.

A: Litigation Costs should be capitalised and amortised over the remaining useful life of the related…

Q: What is meant by depreciable base? How is it determined?

A: Depreciable base: The word depreciable base is used to depict the value that is divided by the…

Q: What factors affect a property’s projected NOI?

A: NOI is the abbreviation used for Net operating income. It is used to analyze the profit which will…

Q: why does fair value seeking for an acquisition?

A: Reasonable worth is a term with a few implications in the monetary world. In contributing, it…

Q: Why would refinancing be an alternative to sale of the property?

A: Individuals always buy the properties taking the mortgage because payment for buying the property…

Q: Which asset never depreciates in value?

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: Is goodwill a long-lived asset?

A: Goodwill is known as asset that includes company image. It is an intangible assets which do not…

Q: Assuming interest costs related to an asset qualify for interest capitalization, which of the…

A: Option 4 is correct The amount that should be capitalised is the lower of actual interest cost…

Q: What is the treatment of any gain on a subsequent increase in the fair value less cost of disposal…

A: Subsequent will increase in truthful price. A gain for associated consequent increase in truthful…

Q: Explain the accounting for gain and loss ­contingencies.

A: Contingencies:   Contingency is a situation where the outcome becomes uncertain and is resolved in…

Q: Why might disinflation prove favorable to financial assets?

A: Disinflation is the reduction or lowering of the pace of inflation. In other words in situation of…

Q: What factors would result in property increasing in value over a holding period?

A: One holding period is the length of time a creditor retains or the time between purchasing and…

Q: Are Inventories depreciable property? Why?

A: Depreciable property means an asset which is eligible to book depreciation for accounting and tax…

Q: What is meant by “loss to lease”? Explain?

A: Loss to lease: It is the term used in Real Estate in leasing of property mainly apartment complexes,…

Q: Define and discuss survivorship bias and selection bias, and how they affect reported returns of…

A: Survivorship bias is a type of bias in which a person has a tendency to view the performance of…

Q: How should goodwill be amortized?

A: Goodwill is an example of intangible assets which has no physical identity.

Q: Analyze why disposition rather than acquisition is a characteristic

A: Gain or Loss on Disposition refers to the gain or loss resulting from the sale, exchange, or other…

Q: What are the important properties of real estate as an asset class? How are they similar/different…

A: The real estate investment class is a type of investment class which is focusing upon investing in…

Q: What are the requirements of depreciating an asset?

A: Depreciation is a non-cash expense which is charged against the use of the fixed assets of the…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.