[PerAsperaAdAstra]

If there is an idle equipment that can be used for producing extra output, should we count annual depreciation cost when calculating net profit?

[EZ_Sims_4_me_Pls]

if the asset is available for use, you can depreciate it under the “idle asset rule”.

so, if the company was trying to reduce its income tax burden, it would probably depreciate idle property

you should probably refrain from disclosing exam questions btw. AICPA frowns on it.

[PerAsperaAdAstra]

so if they use this equipment for producing extra output, when calculating effect on total profit of the entire division, they will account for depreciation minus tax effect?

P.S.I edited my original message, does it look better for AICPA now?

[Author]

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