alleryStart learning →Non-deductible Rs. 1,000 asset, 40% rate: is the Rs. 400 liability booked?
AYes, against goodwill
BYes, in profit or loss
CYes, directly in equity
DNo, initial recognition rule
Answer & Solution
Correct answer: D. No, initial recognition rule
The transaction affects neither accounting nor taxable profit, so the exemption bars recognition at the start and later as the asset is depreciated.
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