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Adjustment in depreciation from fair value adjustment

This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.

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November 13, 2017 at 3:32 am #415467
zaheerzaynah
Member
- Topics: 4
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In case there is a downward fair value adjustment on a depreciable item of non-current asset, how will the adjustment for depreciation be done?
I would have:
Dr Group PPE
Cr Net assets of subsidiary @ reporting date
Is that right?
November 19, 2017 at 8:38 pm #416737
P2-D2
Keymaster
- Topics: 4
- Replies: 7136
Hi,
Yes that’s correct, as the reduction in the fair value means that we will be charging less depreciation in the group accounts and so the depreciation needs to be added back.
Thanks
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