Dear Chris
How are you?
I hope you are doing well,
How can we represent complex assets in the face of balance sheet?
I mean should we represent it as one figure like for example the value of aircraft =10000000. Or we can represent as body=2000000,
Aircraft engine=4000000
Aircraft Interior =4000000.
And if one figure how can we deal with depreciation since each part has its useful life and own residual value?
Ask the Tutor ACCA FR
CH2, complex asset.
Hi,
The complex asset would be shown as one asset in the accounts, i.e. aircraft (as part of PPE). Each part is then depreciated separately over its useful life and then the depreciation for each individual component combined together to give the total depreciation for the asset. This is then netted off against the cost of the asset to give the carrying value.
Thanks
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