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Basic Fundamental Depreciation FA Question

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Basic Fundamental Depreciation FA Question

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by John Moffat.
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  • April 16, 2020 at 10:15 am #568431
    Stuartwantstoknow
    Participant
    • Topics: 4
    • Replies: 2
    • ☆

    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.

    April 16, 2020 at 10:50 am #568433
    Stuartwantstoknow
    Participant
    • Topics: 4
    • Replies: 2
    • ☆

    Sorry ignore question just figured it is the first entry.

    April 16, 2020 at 2:43 pm #568456
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    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 🙂 )

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  • The topic ‘Basic Fundamental Depreciation FA Question’ is closed to new replies.

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