RSM220H1 Lecture Notes - Lecture 10: Book Value
Document Summary
What pattern best reflects how asset"s benefits are used up. Each significant part of ppe asset should be depreciated as separate component. Multiple components may be grouped if they have same useful lives and depreciation methods. Parts of ppe asset that are not individually significant can be grouped and depreciated as single component. Residual value is net amount expected to be received for asset today if it were of the age and in the condition expected at the end of its useful life. Residual value should be reviewed at least annually under ifrs. Depreciate as long as residual value lower than carrying amount. Salvage value is estimated nrv at end of asset"s life (not at end of useful life) Ends when asset is derecognized or classified as held for sale. Useful life and physical life are not the same. Period of time over which asset will produce revenue for company. Reflect pattern of benefits expected from use of asset.
