IAS 16 – Depreciation – ACCA (SBR) lectures

Comments

1. Thomas says

   February 17, 2020 at 8:21 pm

   Hi

   Just for my understanding, would there also be (1) figure in OCE being the extra depreciation which would then be transferred to retained earnings or does this not happen with a change in estimated useful life. Thanks

   Log in to Reply

   • accamanishnegi says

     May 1, 2020 at 8:43 pm

     Yes, you are right, there are two possible ways to deal with it:-
     a) We have to transfer 1 million amount to retained earnings.
     The entry each year would be :-
     Dr. Revaluation Surplus 1 million
     Cr. Retained Earnings 1 million
     Or:-
     b) We can transfer full amount of excess depreciation at the end of useful life of asset to Retained Earnings from Revaluation Surplus

     Log in to Reply

     • jasonjk says

       September 17, 2020 at 1:55 pm

       So you all are saying it can be treated as a revaluation? Why no where else says that?
       2015 under new estimated life WDV= 14m Depn chg= 3.5m
       2015 under old estimated life WDV= 15m Depn chg= 2.5m

       Then recording as a revaluation u would then have to credit PPE and debit Impairment on the income stmt, which makes no sense as the actual depn would not be shown properly, so i do not understand what you all are saying above.