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From example 3 , when using straight line we are charging equal amount annually, but why did you have to change the amount ? Was it because the estimated life was change to 5 years ? Because i see you used 17500 which was the cv of the asset.
Hi,
We’ve changed the depreciation amount as there has been a change in the estimate of the economic life of the asset and the new deprecation charge needs to reflect this.
IAS 8 states that we take the carrying value and apply the new estimated economic life to it in order to calculate the new depreciation charge.
Thanks
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