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TTolu5y ago
hello Chris Thank you for the lectures however while I was solving question from Kaplan exam kit, I came across this question Smithson Co purchased a new building with a 50-year life for $10 million on 1 January 20X3. On 30 June 20X5, Smithson Co moved out of the building and rented it out to third parties on a short-term lease. Smithson Co uses the fair value model for investment properties. At 30 June 20X5 the fair value of the property was $11 million and at 31 December 20X5 it was $11.5 million. The question I have is.... While I used 2yrs 6mnths (1 Jan 20x3 - 30 June 20x5) for my depreciation (accumulated depreciation )..... They just used 6 months for their depreciation. Why did they use just 6 months. Thank you
PP2-D2Tutor5y ago#1
Hi, I presume that this is the depreciation on the asset from the start of the year to when the change in use occurred, which would appear in the SPL. Thanks
PP2-D2Tutor5y ago#2
Hi, I presume that this is the depreciation on the asset from the start of the year to when the change in use occurred, which would appear in the SPL. Thanks
TTolu5y ago#3
Ok Thank you
PP2-D2Tutor5y ago#4
You're welcome!
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