FR – Chapter 7 (IAS 36) – Exam prep question

Good day Sir,

This refers to the exam prep question at the end of Chapter 7 in the study text for FR exam.All figures are expressed as ($ ‘000s).

In the workings for office building I see that the depreciation is calculated as $500 and would like to know how the figure was arrived at.

I assumed that if the useful life has been changed to 10 years in the middle of the acc period and the Carrying value of the asset is now $14, 000 then the depreciation for the year would be as follows (14, 000/10 yrs x 6/12) = $ 750.

In the schedule of adjustments to the retained earnings, I see that the 2nd depreciation is written as $750 so I’m a bit confused.

Thanks in advance.