property is P400,000,000 (cost of P500,000,000 and accumulated depreciation of P100,000,000). The hotel is depreciated on the straight line method with a useful life of 50 years. The estimate of the fair value less cost to sell on this date is P350,000,000. On January 1, 2023 no buyer could be identified. On this date, management concludes that the criteria for classification could not be met. The estimate of the fair value less cost to sell is revised to P340,000,000 while the value in use at the time is estimated at P380,000,000. - What Amount of impairment
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 January 1, 2022, LCC Company classifies a hotel property a non-current asset held for sale. Immediately before the classification as held for sale, the carrying amount of the property is P400,000,000 (cost of P500,000,000 and
- What Amount of impairment loss should LCC Company recognize at the date the asset was classified as held for sale?
- The amount taken to profit or loss on the date the assest was reclassified back to property, plant and equipment is
-The depreciation expense for 2023 after the asset was reclassified back to PPE is
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