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Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Useful life assumption
Hi All
As I do practice examples for F3, I have come across this issue of useful life assumption a couple of times.
The question will state that the NCA (usually land) has been revalued to a higher amount, it states the depreciation percentage and finally, it says that there is no change to the useful life after the revaluation.
I understand all of the above no problem, but after fighting with this question for a while and then getting the wrong answer, I discover that the useful life was originally 50 years! I didn’t see 50 years in the question…
I have come across this type of question a couple of times.
For exam purposes, do we automatically assume a useful life of 50 years if it is not mentioned in the question??
if depreciation percentage is 1% then useful life is 100 years.
and if 2% then useful life is 50 years.
and if 4% then useful life is 25 years.
and if 10% then useful life is 10 years.
and so on.