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in part (a), in the very first second paragraph where it explains the 1.6million of new packing machine was acquired by Stanley co in march 2015 and soon had a carrying amount of 1.4million at 31 december.
Since there was a change of value of 0.,2million and not properly explained in the question, shouldn’t we suppose to discuss in detail ? that how 0.2 million had been decreased ? like an impairment or depreciation been done ?
It’s immaterial so not worth any digression. It’s 12.5% (i.e. depreciated over 8 years) – so not unreasonable. The examiner is indicating that it has been depreciated (the principal reason why carrying amount is less than cost) to focus attention on the real issue which is that the asset hasn’t been physically inspected.
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