Tangible Non-Current Assets

This is from the question: "The expected life of the new propulsion was 50,000 hours & in the year ended 30 Sep 20X5 the ship had used its engines for 5,000 hrs." So the depreciation of the new propulsion system was 5,000 / 50,000 x $140 million = $14 million When they installed the new propulsion system in early October 20X4 they would scrap the old system so the fact that the old system theoretically still had 10,000 useful hours was re-estimated on the grounds of its unreliability "Propulsion system 100 Useful life of 40,000 hours" The old system originally cost $100 and had been used for 30,000 out of its estimated 40,000 useful hours So accumulated depreciation up to September 20X4 would have been $75,000 and the system with a book value / carrying value of $25,000 was then scrapped ... and that's where the $25,000 comes from "the entity too the opportunity to do a limited upgrade to the facilities at a cost of $60million and repaint the ship’s fabric at a cost of $20 million" The upgrade is included as capital expenditure and will be depreciated over 5 years The repainting of the ship's fabric (I assume) does neither improve the earning capacity of the ship nor extend its useful life and is therefore expensed Does that answer it for you?