What is the depreciable amount of a non-current asset?
Correct answer: B. Its cost less its estimated residual value
- A. Its original cost plus accumulated depreciation
- B. Its cost less its estimated residual value
- C. Its carrying amount plus impairment losses
- D. Its residual value less accumulated depreciation
Explanation
Depreciable amount is the portion of an asset's cost that is allocated as depreciation over its useful life. It is calculated by deducting estimated residual value from cost or another substituted amount under the applicable accounting model.
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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.
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