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Dear Tutor,
I have question about Question #3, exam December 2012.
Why there was no adjustment to capital employed as to economic depreciation?
I ACCA technical article about EVA is written, that we should Adjust value of non-current
assets (and capital employed) to reflect economic depreciation not accounting depreciation.Thank you!
EvgeniiaBecaause the question says:
“In previous years, it can be assumed that economic and accounting depreciation were the same.” ie for 2011 and before. So, the opening CE as at 1/1/2012 is not affected by historical depreciation adjustments. Remember EVA uses opening CE.
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