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Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Basic Fundamental Depreciation FA Question
This is pretty basic but can’t find anything online to confirm one way or the other for subsequent years SOFP’s.
To give the question context lets say we have £10k asset, straight line method £0 residual over 5 year term- so £2k a year.
In the statement of financial position we have the asset cost less accumulated depreciation to give Net Book value yes?
So first year NBV will be £10k – £2k = £8k
What about in subsequent years SOFP’s? do you have original Asset less accumulated depreciation- so £10k always remains at the top less £2k, then £4k, then £6k etc?
Or do you have last years NBV less this years depreciation. So in year 2 NBV of £8k-£2k,
Year 3 NBV £6k-£2k etc?
Thanks all in advance.
Sorry ignore question just figured it is the first entry.
Correct 🙂
(And do watch my free lectures on this. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well 🙂 )