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IAS 16 – PPE – Depreciation

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › IAS 16 – PPE – Depreciation

  • This topic has 2 replies, 2 voices, and was last updated 10 years ago by hoocool.
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  • Author
    Posts
  • June 10, 2015 at 5:56 pm #256138
    hoocool
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Hey~~anyone know about this :-

    Company ABC has several assets , Plant&machinery, FreeholdLand, Buildings,Motor vehicles.

    The management would like to use difference depreciation method to depreciate the assets, such as, using straight line method to depreciate Building and Motor vehicles , using reducing balance method to depreciate plant and machinery .

    IAS 16 is it allow the company do this ?

    they can use difference depreciation method for difference categories assets ??

    Thanks

    June 10, 2015 at 6:10 pm #256145
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Of course it’s allowed. How can you imagine the possibility of depreciating a building over the same time period as a computer system? And would you select 50 years for the computer system or would you favour 2 years for the building?

    It makes NO SENSE at all to have just one depreciation rate. But all the assets in a class shall have the same depreciation rate applied to those assets in that class.

    Not only that but there have been two exam question this century where a single asset has had 5 (yes, five) different depreciation rates applied to that single asset! An aircraft was one and a ferry was the other. Different elements within that one asset have different useful lives so different rates apply to those different elements

    Ok?

    In future, if you have a question like this that you want me to answer, put your question on the ask the tutor page rather than on the general forum

    June 11, 2015 at 1:12 am #256221
    hoocool
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Ok ~~thanks for your reply.

    But i mean is using difference method to depreciate not %.
    In one company they will try to using Straight line method and reducing balance method to depreciate difference categories assets (not %).

    BTW, where is the tutor page ?

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