on 30 september 20x7, the impairment review was carried out. the following amounts were established in respect of the machine : carrying amount: 850,000 value in use:760,000 fair value : 850,000 cost of disposal : 30,000 what should be the carrying amount of the machine following the impairment review
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
on 30 september 20x7, the impairment review was carried out. the following amounts were established in respect of the machine :
carrying amount: 850,000
value in use:760,000
fair value : 850,000
cost of disposal : 30,000
what should be the carrying amount of the machine following the impairment review
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