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.
ACCA Forums
FABasic Fundamental Depreciation FA Question
Sorry ignore question just figured it is the first entry.
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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