ICAEW AF · Chapter 11 · Question 13 of 13
What is the purpose of depreciation under IAS 16?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) To allocate the depreciable amount of an asset systematically over its useful life
Explanation
Depreciation is the systematic allocation of the depreciable amount (cost or revalued amount less residual value) of an asset over its useful life. It matches the cost of using the asset against the revenue it helps to generate. It does not aim to show market value and does not set aside any cash.
More Non-current assets: cost, depreciation, revaluation and disposal MCQs
- Q2Which of the following is capital expenditure?
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