What would be the effect on this years net profit

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Reference no: EM132951434

Question

Senior management of Telemark Sking Ltd wishes to capitalise $2 650000 in ski-hill improvement costs expended this year, and amortise the capitalised costs over 10 vears, rather than just expensing them all as is now done.

The company's income tax rate is 30 per cent, and the company would plan to continue deducting the costs as expenses in computing income tax payable for this year, assuming the tax authorities would permit that. What would be the effect on this year's net profit?

Reference no: EM132951434

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