Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.

Question

Justus Velez

Business

21 May, 01:30

Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines.

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Answers (1)

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Darion Good · Answer 1

IAS 16 states that the cost of an item of property, plant and equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity; and. the cost of the item can be measured reliably.

Explanation:

Basically the depreciation will reduce the asset value in the assets account