A company acquired a new piece of equipment on January 1, 2011 at a cost of $200,000. The equipment is expected to have a useful life of 10 years, a residual value of $20,000 and is depreciated on a straight-line basis. On January 1, 2013, the equipment was appraised and determined to have a fair value of $190,000 and a residual value of $25,000 and a remaining useful life of 10 years.
At what amount should the equipment be reported on the December 31, 2013 balance sheet under the IFRS cost model?

Question

Quizplus · Accepted Answer

Cost $200,000 - Salvage $20,000 = $180,000/10 years = $18,000 Depreciation per year × 3 years = $54,000Cost $200,000 - Acc. Deprec. ($18,000 × 3) $54,000 = $146,000 BV on 12/31/13

A Company Acquired a New Piece of Equipment on January