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Ask the Tutor ACCA APM

Economic value added

OOluwatobi6y ago
Pls sir,how do I treat depreciation that was deducted to get profit after tax… To get economic profit ? Should i add back to get economic profit or ignore it?it wasn’t indicated on whether economic or accounting
kengarrettkengarrettTutor6y ago#1
The rule is that you add back book depreciation then deduct economic depreciation. If no clue is given as to what sort of depreciation is being talked about then assume that the amount of both depreciation charges is the same so that no net adjustment is needed.
OOluwatobi6y ago#2
Meaning it won't be added back
kengarrettkengarrettTutor6y ago#3
Yes. By default, you have to ignore it.
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