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Measurement – ACCA SBR

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  1. Lets say I have an asset (Machinery) i bought 2 yrs ago for $200,000 and i am just starting operation, what amount am i recording in my SFP, Historical cost or Fair value because the machinery is no longer worth the amount i have purchased it for at the start of my operation.

  2. Many thanks for such Understandable and further explanations. It really helps me. I graduated Georgian version of ACCA and now, I am preparing for the English version of third level, because I have got exemption from ACCA in nine subject.

  3. In the calculation of Depreciation under current cost measurement, current cost at 31 Dec 脳2 is 250k. It is 200k after considering depreciation on 31 Dec 脳2?

    How come PPE are depreciated on the same date? Could you please explain with calculation?

    • Hi,

      We did not purchase the asset at current cost, it’s just that our measurement basis was at current cost.

      Therefore, the initial amount (250k) and the dep charged will always be based on the current cost relevant at the measurement date and the remaining useful life of the asset.

      For instance, if the current cost next year (i.e after 3 years) is 300k. We would recognize the asset at 300k – (30k + 30k + 30k) = 210k.
      (Though we purchased the asset at 200k)

      Hope this helps 馃檪

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