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Halfway through the year an asset is identified as an asset held for sale after meeting the criteria according to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. At the start of the year the carrying amount of the asset was $150,000 (original cost $200,000 two years ago). The asset is being depreciated on a straight-line basis.
What should the depreciation expense for the year be?Hi,
Once the asset is classified as held for sale then it is no longer depreciated but it will be depreciated up until that point in time.
In this scenario the asset was classified as being held for sale half way through the year, so will need to be depreciated for six months before this depreciation is ceased.
Try to have a go at the question now with this information and see how you get on. I’ll then see how you get on if you let me know.
Thanks
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