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  1. avatar says

    The final disposal value of the microscope decreases if you depreciate over a longer period.

    E.g Assume after 5 years it is worth nothing. Depreciation charge is (500 – 0) / 5 = £100 p.a.

    Now consider that it is worth 300 after 2 years. Depreciation charge is (500 – 300) / 2 = £100 p.a.

    So essentially, (And certainly for the purpose of this exam), it makes no difference.

    However, you should generally stick with working out depreciation based on an assets useful life to the company. If the company only intends to keep it for 2 years, it should depreciate it over 2 years.

  2. Profile photo of Sangria9 says

    If we have expenses for development not just wages, but also for example: fees to consultant, fees for electricity, fees for paper and pencils – should we capitalise it and show in balance sheet?

  3. Profile photo of Sangria9 says

    Question:
    For example we buy a tangible asset (e.g., microscope) for development stage and we know that we need this for 2 years (during this time we expect to develop new product), but we also know, that useful life of this tangible asset is 5 years. What life period should we use in our calculations of depreciation: 2 years or 5 years?

    • Profile photo of admin says

      it means that for some reason that your PC can’t connect to the server where the lecture is hosted,
      realod the page, and hopefully it will connect, it could be just temporary glitch
      if it persists, maybe you are behind a firewall, if so, please contact your internet service provider to check this for you

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