Intermediate Accounting: Prepared by University of California, Santa Barbara

Intermediate Accounting
11-1
Prepared by Coby Harmon University of California, Santa Barbara
11
Depreciation, Impairments, and Depletion
Intermediate Accounting 14th Edition
11-2
Kieso, Weygandt, and Warfield
Learning Learning Objectives Objectives

1. ". #.
E plain t!e concept of depreciation. Identify t!e factors involved in t!e depreciation process. Compare activity, straig!t$line, and decreasing$c!arge met!ods of depreciation. E plain special depreciation met!ods. E plain t!e accounting issues related to asset impairment. E plain t!e accounting procedures for depletion of natural resources. E plain !o) to report and analy*e property, plant, e+uipment, and natural resources.
%. &. '.
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11-3
Depreciation, Depreciation, Impairments, Impairments, and and Depletion Depletion

resentation and !nalysis
Presentation Analysis
Depreciation
Impairments
Depletion
Establis!ing a base /rite$off of resource cost Estimating reserves 0i+uidating dividends Continuing controversy
,actors involved -et!ods of depreciation Special met!ods Special issues
.ecogni*ing impairments -easuring Impairments .estoration of loss Assets to be disposed of
11-4
Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

Depreciation is t!e accounting process of allocating t!e cost of tangible assets to e pense in a systematic and rational manner to t!ose periods e pected to benefit from t!e use of t!e asset.
Allocating costs of long$term assets1

,i ed assets 2 3epreciation e pense Intangibles 2 Amorti*ation e pense 4atural resources 2 3epletion e pense
11-"
LO 1 Explain the concept of depreciation.

+actors Involved in t$e Depreciation rocess
'$ree basic ()estions*
516 /!at depreciable base is to be used7 5"6 /!at is t!e asset8s useful life7 5#6 /!at met!od of cost allocation is best7
11-&
LO 2 Identify the factors involved in the depreciation process.

Depreciable -ase
Ill)stration 11-1
11-,

/stimation o% 0ervice Li%es

Service life often differs from p!ysical life. Companies retire assets for t)o reasons1 1. P!ysical factors 5casualty or e piration of p!ysical life6. ". Economic factors 5inade+uacy, supersession, and obsolescence6.
11-.

#et$ods o% Depreciation
9!e profession re+uires t!e met!od employed be :systematic and rational.; E amples include1
516 5"6 5#6 5%6 5&6 5'6
11-1
Activity met!od 5units of use or production6. Straig!t$line met!od. Sum$of$t!e$years8$digits. 3eclining$balance met!od. <roup and composite met!ods. =ybrid or combination met!ods.
LO 3 Compare activity, straight-line, and decreasingcharge methods of depreciation.
Accelerated met!ods
Special met!ods

!ctivity #et$od
Ill)stration 11-2
0tanley Coal #ines +acts

Ill)stration* If Stanley uses t!e crane for %,>>> !ours t!e first year, t!e depreciation c!arge is1
Ill)stration 11-3
11-12
LO 3

0traig$t-Line #et$od
Ill)stration 11-2

Ill)stration* Stanley computes depreciation as follo)s1
Ill)stration 11-4
11-11
LO 3

Decreasing-C$arge #et$ods
Ill)stration 11-2
!m-of-the-"ears#-$igits. Eac! fraction uses t!e sum of t!e years as a denominator 5& ? % ? # ? " ? 1 2 1&6. 9!e n)merator is t!e number of years of estimated life remaining as of t!e beginning of t!e year.
!lternate s)m-o%-t$eyears7 calc)lation n3n415 2 6 "3"415 2 6 1"
LO 3
11-12

0)m-o%-t$e-8ears7-Digits
Ill)stration 11-&
11-13

Decreasing-C$arge #et$ods
Ill)stration 11-2

$eclining-%alance &ethod.
Utili*es a depreciation rate 5percentage6 t!at is some multiple of t!e straig!t$line met!od.
3oes not deduct t!e salvage value in computing t!e depreciation base.
11-14

Declining--alance #et$od
Ill)stration 11-,
11-1"

/11-" 3Depreciation Comp)tations9+o)r #et$ods5* -aserati Corporation purc!ased a ne) mac!ine for its assembly process on August 1, ">1". 9!e cost of t!is mac!ine )as @1&>,>>>. 9!e company estimated t!at t!e mac!ine )ould !ave a salvage value of @"%,>>> at t!e end of its service life. Its life is estimated at & years and its )orAing !ours are estimated at "1,>>> !ours. Bear$end is 3ecember #1. Instr)ctions* Compute t!e depreciation e pense under t!e follo)ing met!ods. 5a6 Straig!t$line depreciation. 5b6 Activity met!od 5c6 Sum$of$t!e$years8$digits. 5d6 3ouble$declining balance.
11-1&

0traig$t-line #et$od
Depreciable 8ear 2212 2213 2214 221" 221& 221, < -ase 12&,222 12&,222 12&,222 12&,222 12&,222 12&,222 = = = = = = 8ears " " " " " " 6 6 6 6 6 6 !nn)al /;pense < 2",222 2",222 2",222 2",222 2",222 2",222 ; ,=12 6 < ; artial 8ear "=12 6 < C)rrent 8ear /;pense 12,"22 2",222 2",222 2",222 2",222 14,,22 12&,222 < !cc)m: Deprec: 12,"22 3",,22 &2,122 .&,122 111,322 12&,222
>o)rnal entry* 2212 Depreciation e;pense !cc)m)ltated depreciation 12,"22 12,"22
11-1,

!ctivity #et$od
3?iven5 Ho)rs 8ear 2212 2213 2214 221" 221& .22 >o)rnal entry* 2212 Depreciation e;pense !cc)m)ltated depreciation
11-1.
3!ss)me .22 $o)rs )sed in 22125

C)rrent
3<12&,222 = 21,222 $o)rs 6 <& per $o)r5

@ate per Ho)rs ; ; ; ; ; <& 6 6 6 6 6 < 4,.22 < !nn)al /;pense 4,.22 artial 8ear < 8ear /;pense 4,.22 < !cc)m: Deprec: 4,.22
Ased .22
4,.22 4,.22
LO 3

0)m-o%-t$e-8ears7-Digits #et$od
8ear 2212 2213 2214 221" 221& 221, Depreciable -ase < 12&,222 12&,222 12&,222 12&,222 12&,222 12&,222 ; ; ; ; ; ; 8ears "=1" 4:".=1" 3:".=1" 2:".=1" 1:".=1" :".=1" 6 6 6 6 6 6 !nn)al /;pense 42,222 3.,"22 32,122 21,,22 13,322 4,122 < ; artial 8ear "=12 <
"=12 6 :41&&&, ,=12 6 :".3333

C)rrent 8ear /;pense 1,,"22 3.,"22 32,122 21,,22 13,322 4,122 12&,222 !cc)m: Deprec: < 1,,"22 "&,222 .&,122 12,,.22 121,122 12&,222
>o)rnal entry* 2212

11-11
Depreciation e;pense !cc)m)ltated depreciation
1,,"22 1,,"22
LO 3

Do)ble-Declining -alance #et$od
8ear 2212 2213 2214 221" 221& Depreciable -ase < 1"2,222 ; 12",222 ; ,",222 ; 4",222 ; 2,,222 ; @ate per 8ear 42B 42B 42B 42B 42B !nn)al /;pense 6 < 6 6 6 6 &2,222 ; "2,222 32,222 1.,222 12,.22 l)g < artial 8ear "=12 6 < C)rrent 8ear /;pense 2",222 "2,222 32,222 1.,222 3,222 12&,222
>o)rnal entry* 2212

11-22
Depreciation e;pense !cc)m)ltated depreciation
2",222 2",222
LO 3

0pecial Depreciation #et$ods
C!oice of met!od depends on nature of t!e assets involved1
?ro)p met$od used )!en t!e assets are similar in nature and !ave appro imately t!e same useful lives. Composite approac$ used )!en t!e assets are dissimilar and !ave different lives.
Companies are also free to develop tailor$made depreciation met!ods, provided t!e met!od results in t!e allocation of an asset8s cost in a systematic and rational manner 3Hybrid or Combination #et$ods5.
11-21
LO ' Explain special depreciation methods.

0pecial Depreciation Iss)es
516 =o) s!ould companies compute depreciation for partial periods7 5"6 3oes depreciation provide for t!e replacement of assets7 5#6 =o) s!ould companies !andle revisions in depreciation rates7
11-22

C$ange in Depreciation @ate
Accounted for in t!e period of c!ange and future periods 5C!ange in Estimate6. 4ot !andled retrospectively. 4ot considered errors or e traordinary items.
11-23
C$ange C$ange in in /stimate /stimate /;ample /;ample

Arcadia =S, purc!ased e+uipment for @&1>,>>> )!ic! )as estimated to !ave a useful life of 1> years )it! a residual value of @1>,>>> at t!e end of t!at time. 3epreciation !as been recorded for ( years on a straig!t$line basis. In ">1" 5year C6, it is determined t!at t!e total estimated life s!ould be 1& years )it! a residual value of @&,>>> at t!e end of t!at time. Duestions1
/!at is t!e Eournal entry to correct t!e prior years8 depreciation7 Calculate t!e depreciation e pense for ">1".
4o Entry .e+uired
11-24

E+uipment cost Salvage value 3epreciable base Useful life 5original6 Annual depreciation @&1>,>>> $ 1>,>>> &>>,>>> 1> years @ &>,>>>
After ( years
,irst, ,irst,establis! establis!4BF 4BF at atdate dateof ofc!ange c!angein in estimate. estimate.
( years 2 @#&>,>>>
Balance S!eet 53ec. #1, ">116 E+uipment Accumulated depreciation 4et booA value 54BF6
11-2"
@&1>,>>> #&>,>>> @1'>,>>>

4et booA value Salvage value 5ne)6 3epreciable base Useful life remaining Annual depreciation @1'>,>>> &,>>> 1&&,>>> C years @ 1G,#(&
After ( years
3epreciation 3epreciation E E pense pensecalculation calculation for for">1". ">1".
Hournal entry for ">1" 3epreciation e pense Accumulated depreciation

11-2&
1G,#(& 1G,#(&
Impairments Impairments
/!en t!e carrying amount of an asset is not recoverable, a company records a )rite$off referred to as an impairment.
/vents leading to an impairment*
a. Significant decrease in t!e fair value of an asset. b. Significant c!ange in t!e manner in )!ic! an asset is used. c. Adverse c!ange in legal factors or in t!e business climate.
d. An accumulation of costs in e cess of t!e amount originally e pected to ac+uire or construct an asset. e. A proEection or forecast t!at demonstrates continuing losses associated )it! an asset.
11-2,
LO ( Explain the acco!nting iss!es related to asset impairment.
#eas)ring Impairments
1. .evie) events for possible impairment. ". If t!e revie) indicates impairment, apply t!e recoverability test. If t!e sum of t!e e pected future net cas! flo)s from t!e long$lived asset is less t!an t!e carrying amount of t!e asset, an impairment !as occurred. #. Assuming an impairment, t!e impairment loss is t!e amount by )!ic! t!e carrying amount of t!e asset e ceeds t!e fair value of t!e asset. 9!e fair value is t!e marAet value or t!e present value of e pected future net cas! flo)s.
11-2.
Ill)stration 11-1& ?rap$ic o% !cco)nting %or Impairments
11-21
LO (
/11-1& 3Impairment5* Presented belo) is information related to e+uipment o)ned by PuEols Company at 3ecember #1, ">1". Assume t!at PuEols )ill continue to use t!is asset in t!e future. As of 3ecember #1, ">1", t!e e+uipment !as a remaining useful life of % years.
Cost Accumulated depreciation to date E pected future net cas! flo)s ,air value @ G,>>>,>>> 1,>>>,>>> (,>>>,>>> %,%>>,>>>
Instr)ctions*
3a5 Prepare t!e Eournal entry 5if any6 to record t!e impairment of t!e asset at 3ecember #1, ">1". 3b5 Prepare t!e Eournal entry to record depreciation e pense for ">1#. 3c5 9!e fair value of t!e e+uipment at 3ecember #1, ">1#, is @&,1>>,>>>. Prepare t!e Eournal entry 5if any6 necessary to record t!is increase in fair value.
11-32
LO (
3a5:
Cost Accumulated depreciation Carrying amount ,air value 0oss on impairment
G,>>>,>>> 1,>>>,>>> C,>>>,>>> %,%>>,>>>
#,'>>,>>>
1"I#1I1" 0oss on impairment Accumulated depreciation

11-31
#,'>>,>>> #,'>>,>>>
3b5:
4et carrying amount Useful life 3epreciation per year
@ @
%,%>>,>>> % years 1,1>>,>>>
1"I#1I11 3epreciation e pense Accumulated depreciation 1,1>>,>>> 1,1>>,>>>
3c5: .estoration of any impairment loss is not permitted.

11-32
Depletion Depletion
Cat)ral reso)rces, often called )asting assets, include
petroleum, minerals, and timber. 9!ey !ave t)o main features1 1. complete removal 5consumption6 of t!e asset, and ". replacement of t!e asset only by an act of nature.
Depletion is t!e process of allocating t!e cost of natural resources.
11-33
LO ) Explain the acco!nting proced!res for depletion of nat!ral reso!rces.
Depletion Depletion
/stablis$ing a Depletion -ase
Computation of t!e depletion base involves four factors1
516 Ac+uisition cost. 5"6 E ploration costs. 5#6 3evelopment costs. 5%6 .estoration costs.
11-34
Depletion Depletion
Drite-o%% o% @eso)rce Cost
4ormally, companies compute depletion on a )nits-o%prod)ction met$od 5activity approac!6. 3epletion is a function of t!e number of units e tracted during t!e period. Calc)lation* 9otal cost J .esidual value 9otal estimated units available Units e tracted
11-3"
2 3epletion cost per unit 2 3epletion
Cost per unit
Depletion Depletion
Ill)stration* -aClede Co. ac+uired t!e rig!t to use 1,>>> acres of land in AlasAa to mine for silver. 9!e lease cost is @&>,>>>, and t!e related e ploration costs on t!e property are @1>>,>>>. Intangible development costs incurred in opening t!e mine are @C&>,>>>. -aClede estimates t!at t!e mine )ill provide appro imately 1>>,>>> ounces of silver.
Ill)stration 11-1,
11-3&
Depletion Depletion
If -aClede e tracts "&,>>> ounces in t!e first year, t!en t!e depletion for t!e year is @"&>,>>> 5"&,>>> ounces @1>6. Inventory Accumulated 3epletion "&>,>>> "&>,>>>
-aClede8s statement of financial position1

Ill)stration 11-1.
3epletion cost related to inventory sold is part of cost of goods sold.

11-3,
LO )
Depletion Depletion
/stimating @ecoverable @eserves

Same as accounting for c!anges in estimates. .evise t!e depletion rate on a prospective basis. 3ivides t!e remaining cost by t!e ne) estimate of t!e recoverable reserves.
11-3.
Depletion Depletion
Li()idating Dividends $ 3ividends greater t!an t!e
amount of accumulated net income.
Ill)stration* Calla!an -ining !ad a retained earnings balance of @1,'&>,>>>, accumulated depletion on mineral properties of @",1>>,>>>, and s!are premium of @&,%#&,%G#. Calla!an8s board declared a dividend of @# a s!are on t!e 1,>>>,>>> s!ares outstanding. It records t!e @#,>>>,>>> cas! dividend as follo)s. .etained Earnings Paid$in Capital in E cess of Par Cas!
11-31
1,'&>,>>> 1,#&>,>>> #,>>>,>>>
Depletion Depletion
Contin)ing Controversy
Kil and <as Industry1

,ull cost concept Successful efforts concept
11-42
resentation resentation and and !nalysis !nalysis

resentation o% roperty, lant, /()ipment, and Cat)ral @eso)rces

Depreciating assets, use Accumulated 3epreciation. Depleting assets may include use of Accumulated 3epletion account, or t!e direct reduction of asset.
Basis of valuation 5cost6 Pledges, liens, and ot!er commitments
Disclos)res
3epreciation e pense for t!e period. Balances of maEor classes of depreciable assets. Accumulated depreciation. A description of t!e depreciation met!ods used.
11-41
LO * Explain ho+ to report and analy,e property, plant, e-!ipment, and nat!ral reso!rces.

!nalysis o% roperty, lant, and /()ipment
!sset ')rnover @atio
#eas)re o% a %irm7s ability to generate sales %rom a partic)lar investment in assets:
Ill)stration 11-22
11-42
LO *

ro%it #argin on 0ales
#eas)re o% t$e ability to generate operating income %rom a partic)lar level o% sales:
Ill)stration 11-21
11-43
LO *

@ate o% @et)rn on !ssets
#eas)res a %irm7s s)ccess in )sing assets to generate earnings:
Ill)stration 11-22
11-44
LO *

Analyst obtains furt!er insig!t into t!e be!avior of .KA by disaggregating it into components of profit margin on sales and asset turnover as follo)s1
.ate of .eturn on Assets 4et Income 2 Average 9otal Assets 4et Sales Average 9otal Assets Profit -argin on Sales 4et Income Asset 9urnover 4et Sales
11-4"

Analyst obtains furt!er insig!t into t!e be!avior of .KA by disaggregating it into components of profit margin on sales and asset turnover as follo)s1
.ate of .eturn on Assets @&#.& 2 5@C#C." ? @C1#.&6 I " '.&L
11-4&
Profit -argin on Sales @&#.& @%G&.&
Asset 9urnover @%G&.& 5@C#C." ? @C1#.&6 I "
1>.&L
.'>
/CDIE
11!
ICCO#/ '!E D/ @/CI!'IOC
#odi%ied !ccelerated Cost @ecovery 0ystem

-AC.S differs from <AAP in t!ree respects1 1. a mandated ta life, )!ic! is generally s!orter t!an t!e economic lifeM ". cost recovery on an accelerated basisM and #. an assigned salvage value of *ero.
11-4,
LO . $escri/e income tax methods of depreciation.
/CDIE
11!

'a; Lives 3@ecovery eriods5
Ill)stration 11!-1
11-4.
/CDIE
11!

'a; Depreciation #et$ods
Ill)stration 11!-2
11-41
/CDIE
11!

Ill)stration* Computer and perip!eral e+uipment purc!ased by 3enise .ode Company on Hanuary 1, ">11.
11-"2
/CDIE
11!

Ill)stration*
Ill)stration 11!-3
11-"1
/CDIE
11!

Ill)stration* Using t!e rates from t!e -AC.S depreciation rate sc!edule for a &$year class of property, .ode computes depreciation as follo)s
Ill)stration 11!-4
Ill)stration 11!-"
11-"2
LO .
/CDIE
11!

Additional Issues

Kptional straig!t$line met!od. 9a versus booA depreciation.
11-"3
@/L/F!C' +!C'0
9!e definition of property, plant, and e+uipment is essentially t!e same under <AAP and I,.S. Under bot! <AAP and I,.S, c!anges in depreciation met!od and c!anges in useful life are treated in t!e current and future periods. Prior periods are not affected. <AAP recently conformed to I,.S in t!is area. 9!e accounting for plant asset disposals is t!e same under <AAP and I,.S. 9!e accounting for t!e initial costs to ac+uire natural resources is similar under <AAP and I,.S.
11-"4
@/L/F!C' +!C'0
Under bot! <AAP and I,.S, interest costs incurred during construction must be capitali*ed. .ecently, I,.S converged to <AAP. 9!e accounting for e c!anges of nonmonetary assets !as recently converged bet)een I,.S and <AAP. <AAP no) re+uires t!at gains on e c!anges of nonmonetary assets be recogni*ed if t!e e c!ange !as commercial substance. 9!is is t!e same frame)orA used in I,.S. <AAP also vie)s depreciation as allocation of cost over an asset8s life. <AAP permits t!e same depreciation met!ods 5straig!t$line, diminis!ing$balance, units$of$production6 as I,.S.
11-""
@/L/F!C' +!C'0
I,.S re+uires component depreciation. Under <AAP, component depreciation is permitted but is rarely used. Under I,.S, companies can use eit!er t!e !istorical cost model or t!e revaluation model. <AAP does not permit revaluations of property, plant, and e+uipment or mineral resources. In testing for impairments of long$lived assets, <AAP uses a t)o$ step model to test for impairments 5details of t!e <AAP impairment test is presented in t!e About t!e 4umbers discussion6. As long as future undiscounted cas! flo)s e ceed t!e carrying amount of t!e asset, no impairment is recorded. 9!e I,.S impairment test is stricter. =o)ever, unliAe <AAP, reversals of impairment losses are permitted.
11-"&
I+@0 0/L+-'/0' GA/0'IOC

/!ic! of t!e follo)ing statements is correct7 a. Bot! I,.S and <AAP permit revaluation of property, plant, and e+uipment. b. I,.S permits revaluation of property, plant, and e+uipment but not <AAP. c. Bot! I,.S and <AAP do not permit revaluation of property, plant, and e+uipment.
d. <AAP permits revaluation of property, plant, and e+uipment but not I,.S.
11-",
I+@0 0/L+-'/0' GA/0'IOC

Under I,.S, value$in$use is defined as1 a. net reali*able value. b. fair value. c. future cas! flo)s discounted to present value.
d. total future undiscounted cas! flo)s.
11-".
Copyrig$t Copyrig$t
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11-"1

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Intermediate Accounting

Prepared by Coby Harmon University of California, Santa Barbara

Depreciation, Impairments, and Depletion

Intermediate Accounting 14th Edition

Kieso, Weygandt, and Warfield

Learning Learning Objectives Objectives

Depreciation, Depreciation, Impairments, Impairments, and and Depletion Depletion

,actors involved -et!ods of depreciation Special met!ods Special issues

.ecogni*ing impairments -easuring Impairments .estoration of loss Assets to be disposed of

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 1 Explain the concept of depreciation.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 2 Identify the factors involved in the depreciation process.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 2 Identify the factors involved in the depreciation process.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 2 Identify the factors involved in the depreciation process.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

0tanley Coal #ines +acts

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

0tanley Coal #ines +acts

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

0tanley Coal #ines +acts

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 3 Compare activity, straight-line, and decreasingcharge methods of depreciation.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

0tanley Coal #ines +acts

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO 3 Compare activity, straight-line, and decreasingcharge methods of depreciation.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

>o)rnal entry* 2212 Depreciation e;pense !cc)m)ltated depreciation 12,"22 12,"22

LO 3 Compare activity, straight-line, and decreasingcharge methods of depreciation.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

3!ss)me .22 $o)rs )sed in 22125

3<12&,222 = 21,222 $o)rs 6 <& per $o)r5

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

"=12 6 :41&&&, ,=12 6 :".3333

>o)rnal entry* 2212

Depreciation e;pense !cc)m)ltated depreciation

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

>o)rnal entry* 2212

Depreciation e;pense !cc)m)ltated depreciation

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO ' Explain special depreciation methods.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO ' Explain special depreciation methods.

Depreciation Depreciation -- #et$od #et$od o% o% Cost Cost !llocation !llocation

LO ' Explain special depreciation methods.

C$ange C$ange in in /stimate /stimate /;ample /;ample

LO ' Explain special depreciation methods.

C$ange C$ange in in /stimate /stimate /;ample /;ample

@&1>,>>> #&>,>>> @1'>,>>>

LO ' Explain special depreciation methods.

C$ange C$ange in in /stimate /stimate /;ample /;ample

Hournal entry for ">1" 3epreciation e pense Accumulated depreciation

LO ' Explain special depreciation methods.

LO ( Explain the acco!nting iss!es related to asset impairment.

LO ( Explain the acco!nting iss!es related to asset impairment.

Cost Accumulated depreciation Carrying amount ,air value 0oss on impairment

G,>>>,>>> 1,>>>,>>> C,>>>,>>> %,%>>,>>>