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Sir in 12/07 que fino we depreciated the lease for only six months as it was taken just 6 months prior to year end
but in a bpp preparation que evan the lease was taken on i .10 2003 and we are arequired to prepare the extract for Financial statement for the y/e 31.12.2003 here they have taken full year depreciation
in both cases the lease is in advance
moreove Sir, in evans they have not included any prepayment but in fino there is a prepaymentWhy is this thread titles “Operating lease”?
Depreciation policy differs from company to company and from exam question to exam question.
I have neither the 2003 exam nor the December 2007 exam but it might be worthwhile you checking to see the depreciation policy per the questions.
One may say depreciation is charged “at the rate of x%” (or equivalent) meaning that depreciation is calculated for the fraction of the year in which the asset is acquired or disposed of.
The other may say depreciation is charged “at x% per annum” indicating a full year’s charge in the year of purchase and none in the year of sale
Sorry not to be able to assist more definitively
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