GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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AS - 6 is silent in this regard
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Original cost of the assets
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Depreciated value of the assets
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The revalued amount on the estimate of the remaining useful life of such assets
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Detailed explanation-1: -In case the depreciable assets are revalued, the provision for depreciation is based on the revalued amount on the estimate of the remaining useful life of such assets.
Detailed explanation-2: -26. Where the depreciable assets are revalued, the provision for depreciation should be based on the revalued amount and on the estimate of the remaining useful lives of such assets.
Detailed explanation-3: -Revaluation method of depreciation is the easiest method of depreciation. In this method, the asset value is assessed at the staring of the year and at the end of the year and difference between them is considered as depreciation to be charged. Revaluation method of depreciation will be done on fixed assets.
Detailed explanation-4: -The purpose of providing depreciation on fixed asset is to ascertain true value of an asset, to replace asset, to ascertain correct profit or loss on sale of asset and to compute correct tax liability, etc.
Detailed explanation-5: -Depreciation of revalued assets The asset must continue to be depreciated following the revaluation. However, now that the asset has been revalued the depreciable amount has changed. In simple terms the revalued amount should be depreciated over the asset’s remaining useful life.