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Revised useful life of Assets

11 July 2009 938 views 6 Comments

Dear all

If the life of an Asset is revised. Should we give effect retrospectively or prospectively. Please give refernce from IFRS/IAS.

and is it mandotary to revise the whole class of assets life. e.g if one truck is working in desert /rough areas and one is in city area do we have to revised the life of both?

Regards

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    # 12 July 2009 at 1:26 am
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    # 12 July 2009 at 2:40 am
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    # 12 July 2009 at 4:55 am
  • itssuprio said:

    The structure or product of truck definitely differ. A truck used in city to transport materials can not run in desert areas, same way A truck particularly designed and produced for desert areas is not useful in the crowded city. As per vehicle is concerned depreciation to be calculated on machine hours method . For a transport company its main asset is vehicle. Depreciation cannot be charged on the basis of useful life here the utilization of the vehicle may be considered. As an example, The cost of a vehicle is Rs. 5000000/- its normal mileage capacity is 200000 KM. out of which it has run during the year 100000 KM. Depreciation should be Rs 2500000/-. In this case useful life to be evaluated in terms of mileage than year.

    # 12 July 2009 at 1:22 pm
  • chirag_d said:

    Please refer para.. 32 to 38 of IAS 8, it has to be considered as change in estimates and may not require retrospective application.. subject to para 37 of the said standards.

    # 13 July 2009 at 6:15 am
  • admin (author) said:

    Message from Tejas

    Prospective as it is change in estimate IAS 8.
    No need to revise whole class IAS 16.

    Regards

    # 13 July 2009 at 7:27 am

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