A company has both intangible assets which form the resource of a company and these resources bring about the value to the organization. However, the company may find if difficult to incorporate the value of these resources as it is difficult to measure. In your opinion, can you think of resources of a business that can not usually be measured reliably in monetary terms 2 (a) Assume a company buys an RM7900 machine on the first day of year 1 and depreciates the asset cost over 4 years with an expected salvage value of RM2500? Capital allowances are given on assets at 25% on the reducing balance method. Assume that the tax rate is 30 percent, and calculate the yearly timing difference. Guidelines – Timing Difference on deferred tax (b) The government has identified some projects which are environmentally friendly and all projects that acquire fixed assets will be granted tax allowances. The company has decided to purchase plant and machinery which promote a green environment at a cost of RM124,000 and the asset will be depreciated over a full 4 years period. It has no expected salvage value at the end of the asset life. Capital allowance is given on assets at 40% for the first year and 20 % for the next three years. 

Assume that the tax rate is 30 percent, and calculate the yearly timing difference.

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