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Value in use

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  • December 12, 2019 at 10:39 am
    Value in use 2
    arunotes
    Participant

    Hi sir, may I knw if the historical cost machine is 50k and residual value is 20k and useful life 5 years. To replace the machine with a new version would cost 70k and residual value is 30k and useful life is 4 years.

    When we calculate the value in use, for the residual value I have to use 20k or 30k?

    Thanks sir

    December 13, 2019 at 9:53 pm
    Value in use 3
    P2-D2
    Keymaster

    Hi,

    The residual value is an estimate so any changes in the estimate are dealt with prospectively, and so you would work the deprecation based on the new residual value of 30k.

    Thanks

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