AccountingCode 9706
Changing asset values
What this topic asks you to be able to do
- the things that make non-current assets depreciate in value
- the reason for recording depreciation on non-current assets, along with how the relevant accounting concepts are applied to it
- how to work out depreciation by the reducing balance method and by the straight-line method
- which depreciation calculation method is most suitable
- the procedure for valuing non-current assets under the cost model or under the revaluation model
- the way to draw up journal entries and ledger accounts for: acquiring and revaluing non-current assets; charging depreciation and recording disposals (including the entries for a part exchange)
- the method for working out the profit or loss arising when a non-current asset is disposed of
- how to record what a depreciation charge does to a business's statement of profit or loss, as well as to its statement of financial position