A non-current property, plant and equipment asset is depreciated using the straight-line method. The asset was revalued upwards after four years of use. There is no change in the remaining useful life of six years or to the residual value. Which of the following relationships reflects the effect of the revaluation on the prospective depreciation of the asset:

Question

Quizplus · Accepted Answer

The revaluation of the asset will increase its carrying amount, which will result in a higher annual depreciation expense for the remaining useful life of the asset. However, as there is no change in the remaining useful life or the residual value, the depreciation rate will remain the same. Therefore, option A is the correct answer.

A Non-Current Property, Plant and Equipment Asset Is Depreciated Using