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HI John
I had in exam (which I failed) the next question.
An asset has value of 50000 $, a residual value of 1000$ and an useful life of 7 years. It was borrowed at 01.04.20×5. It is depreciated straight line with 25% in the year of acquisition and in the year of disposal.
At 30.09.20×8 it is revalued at 41000$. No changes in the remaining life.
What is the amount charged in P&L at 31.12.20×8?Thank you,
CameliaIs the answer £12,250 ((50,000-1,000)/4)? The upwards revaluation on 30.09.20×8 would be taken to other components of equity, so would not affect P&L. But I could be wrong!
Thanks for the answer. Unfortunately I didn’t specify correct the matter of depreciation. The asset is depreciated straight line. Nothing about 25%.
But even if upwards revaluation on 30.09.20×8 is taken to other components of equity, the asset is still depreciated, for 3 month, at the new value. The calculation was provided by John.Camelia
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