How often should the depreciation method for a non-current asset normally be reviewed under IAS 16?
Correct answer: B. At least at each financial year-end
- A. Only when the asset is disposed of
- B. At least at each financial year-end
- C. Only after a physical accident
- D. Once every ten financial years
Explanation
The depreciation method is reviewed at least at each financial year-end to determine whether it still reflects the pattern of consumption of economic benefits. A change is made when that consumption pattern changes, rather than only after disposal or damage.
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About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
Practise Depreciation and Non-Current Assets
33 free Depreciation and Non-Current Assets MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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