Assets held for sale depreciation

RFRabia Faraz8y ago

Hi, My question is: At the reporting date an asset is identified as an asset held for sale after meeting the crieteria according to IFRS 5.At the reporting date carrying value of asset was £ 150,000(original cost £200,000 two years ago).the asset has a ten year life and the entity has the policy to depreciate asset using straight line method. What should be depreciation for the year? The answer to this is £ 15,000. I think it to be £20,000 because we depreciate assets on original cost before it z declared as held for sale.Plz explain this. Thanks Thanks

P2-D2Tutor8y ago#1

Hi, Where did you get the question from? It looks a bit odd. Thanks Chris

RFRabia Faraz8y ago#2

Hi, Well this is from F1 Kaplan book practice questions from topic discontinued operations IFRS 5. I was bit confused too about this question. Thanks

P2-D2Tutor8y ago#3

Hi, I've not got the textbook but if we bought it for 200,000 and are depreciating it over ten years then it should be 20,000 per annum. What confuses me is that if we bought it two years ago then the carrying value should be 160,000 being two years of accumulated depreciation of 40,000. Thanks