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Depreciation Example 1 – ACCA Financial Accounting (FA) lectures

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  1. Hello,

    Awesome Lectures and congratulations for your work. However, I have a concern or a question, so to say. If we pay insurance for the car every year, would that be considered as a capitalized expenditure for the car or as a normal revenue expense? If it is a capital expenditure, do we have to add the insurance cost for the car (or maybe even repairment costs) to the value of the car at the end-year or should it be registered in the Financial Statement of Profit or Loss as a separate expense not related to the car value nor depreciation?

  2. Entertaining & useful lecture sir !

    Wish you brought the combination of the red pen back, though. It suited the screen much more making the notes more user friendly, alongside your nice good red tie.

  3. Thank you John. What about the scrap value of $2,000 at the end of the year? Would it be kept in FAR? if yes, how long would it be there in FAR if company doesn’t sale it for next many number of years.

    • I have no idea what you mean by “FAR”.

      If you are meaning the net amount that is shown on the Statement of Financial Position then that won’t be relevant for the exam. However in real life then if the asset was still being used they should continue to depreciate and would change their depreciation policy. Again, in real life businesses do not estimate a future sales value and are more likely anyway to use reducing balance depreciation.

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