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Useful life assumption

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Useful life assumption

  • This topic has 1 reply, 2 voices, and was last updated 14 years ago by Vipin .
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  • July 31, 2011 at 4:56 pm #49381
    darrenbotes
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    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??

    November 13, 2011 at 6:16 am #86196
    Vipin
    Member
    • Topics: 151
    • Replies: 365
    • ☆☆☆☆

    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.

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