Terms you should know
Eligible capital property
You may buy property that does not physically exist but gives you a lasting economic benefit. This kind of property is eligible capital property.
We consider franchises, concessions, or licences with a limited period to be depreciable properties, not eligible capital properties. For details about depreciable properties, go to Claiming capital cost allowance (CCA).
For 2017 and future tax years, this property is now included in capital cost allowance Class 14.1.
Eligible capital expenditure
The price you pay to buy eligible capital property is an eligible capital expenditure.
You cannot fully deduct an eligible capital expenditure because the expenditure is considered to be capital in nature and provides a lasting economic benefit. However, you can deduct part of its cost each year. We call the amount you can deduct your annual allowance.
Cumulative eligible capital (CEC) account
This is the bookkeeping record you establish to determine your annual allowance. You also use your CEC account to keep track of the property you buy and sell. We call the property in your CEC account your eligible capital property. You base your annual allowance on the balance in your CEC account at the end of your fiscal period. Keep a separate account for each business, but include all eligible capital property for the one business in the same CEC account.
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