What method company should use in order to decrease tax

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Problem 1: The OK Company purchased a new building for P10 million on January 1, 2020. It will depreciate this building on a straight-line basis over its useful life of 10 years, assuming a zero-residual value. Also, on January 1, 2021 the company received a government grant of P1 million to help finance this machinery. The company is contemplating whether to use deferred income or deduction from asset approach. In order to decrease tax (lower the income and the higher the expense, the lower the tax), company should use what method? Explain your answer

Reference no: EM132836695

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