Chapter 7 in OT notes Exam Prep Question Page 35

Question: Shea Co. acquired an office Building for $25m on 1st January 20x2 with an estimated useful life of 20 years. On 1 July 20x8, the building was deemed impaired as its value in use was estimated to be $14m. At that date, the estimated useful life was revised to 10 years. My problem: The Depreciation charge of 6 months after the Impairment in the answer is (500) while the way I have calculated it gives me (700) The way I solved the problem: Cost 25,000 Acc. dep. -7,500 C.V. 17,500 Dep. (25000/20x6/12) -625 C.V. 16,875 Impairment (16,875-14000) -2,875 C.V. (1.7.08) 14,000 Dep. (14,000/10x6/12) -700 C.V. 13,300