Under the straight line
approach, the useful life of the
depreciable assets must be estimated
according to the Regulations. The
annual capital cost allowance taken
represents a pro-rated amount based
on the estimate.
The calculation of CCA for Class
13 (leasehold improvements paid by
the tenant), uses a straight line as
opposed to declining balance method.
An example is provided regarding
entries over a two-year period for
an item with a useful life of ten
years.
Example of
Capital Cost
Allowance–Straight
Line Method
Assume that the capital cost
allowance for an item is ten years,
with a pro-rated straight line
calculation of depreciation.
Following are the entries for the
first two-year period:
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