Eligible Capital Properties (ECP) include Goodwill, Customer Lists, Trademarks, Incorporation Costs etc.. Many of them are recorded as intangible assets in the financial statements.
Under the old rule, 75% of the costs are included in Cumulative Eligible Capital (CEC) and amortized by 7% each year using declining balance method. Starting January 1, 2017, the CEC is replaced by Capital Cost Allowance (CCA) Class 14.1 and is depreciated using declining balance method with 5% depreciation rate. In addition, the first $3,000 of incorporation expenses that occurs after January 1, 2017 are expensed rather than added to a CCA class.
The following transition rules are applied to CEC balance before January 1, 2017:
ECP is replaced by CCA (Class 14.1)
For more information, please contact us @ 604-639-3229 or email@example.com
Note: All information relating to the new CCA Class 14.1 above is available from Government of Canada website.
By Theresa Lo, CPA, CGA
October 7, 2017
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Theresa Lo, CPA
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Burnaby, British Columbia