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Depreciation

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Depreciation

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by neilsolaris.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 17, 2015 at 1:54 pm #276870
    racucamelia
    Member
    • Topics: 34
    • Replies: 39
    • ☆☆

    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,
    Camelia

    October 23, 2015 at 6:25 pm #278604
    neilsolaris
    Member
    • Topics: 59
    • Replies: 415
    • ☆☆☆

    Is 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!

    October 23, 2015 at 6:47 pm #278607
    racucamelia
    Member
    • Topics: 34
    • Replies: 39
    • ☆☆

    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

    October 23, 2015 at 7:59 pm #278622
    neilsolaris
    Member
    • Topics: 59
    • Replies: 415
    • ☆☆☆

    Oh yes, silly me!

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