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Muhammad Danyal says
December 2, 2015 at 7:22 am
Sir i have a question please…Reducing balance method says an asset benefits us more in starting years than coming years but we charge same rate, for example 20% each year why is that as it has to be fair basis…i am having a lot of confusion….please advice….thanks
John Moffat says
December 2, 2015 at 8:00 am
Although the % is the same, it is a % of a reducing balance (a % of the net book value each year rather than on the original cost). Therefore the actual depreciation expense each year is higher at the start and then gets lower year after year.
I do suggest that watch the next lecture working through example 2 from the free lecture notes, which is reducing balance depreciation.
January 24, 2016 at 3:40 pm
There is no lecture on example 2 of depreciation
on your website
January 25, 2016 at 6:55 am
Yes there is!
The lecture on this page works through example 1 and example 2.
March 5, 2015 at 10:58 pm
please I have a problem with overhead reapportionment in F2
March 6, 2015 at 8:51 am
Why have you asked this under a lecture on a Paper F3 topic?
You will find lectures on overhead apportionment in the Paper F2 lectures.
March 7, 2015 at 1:27 pm
I don’t understand you
I said I don’t understand overhead reapportionment
The reciprocal method in F2
March 7, 2015 at 1:33 pm
I know what you said, but you wrote your comment under a Paper F3 lecture on Depreciation and IAS 16.
Again, you will find lectures on overhead apportionments (including reciprocal) in the Paper F2 list of lectures.
March 7, 2015 at 1:52 pm
Ok thank you very much
March 7, 2015 at 2:09 pm
Please can you explain the Revaluation of an asset to me
March 7, 2015 at 2:13 pm
It is dealt with in the lecture on Company Accounts.
March 5, 2015 at 5:21 pm
I have a question that if we purchase an asset and we know that its value will increase instead of decrease with the passage of time(e g, we purchase a building and we know that its value will increase with time).Should we depreciate such an asset or not??
March 6, 2015 at 8:50 am
Yes – you have to depreciate per IAS 16 (if it is an asset with a limited life).
The purpose is not to show a true value, but to spread the cost over the useful life.
(If the value does increase substantially, then you are allowed to revalue – but this is a separate issue.)
March 6, 2015 at 10:07 pm
Thank you very much.extremely helpful
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