Know Your Rights!!

Have you come across a situation when you find that the block of assets are fully depreciated in the books but the company is still using them in its operation to generate revenue?  In this case, the original estimate of assets useful life proved to be incorrect. These assets are used beyond their useful life, they are fully depreciated and their carrying amount in the books is zero. What depreciation expense can you recognize in the profit or loss? None, of course – because the carrying amount of the assets cannot be sub zero. As a result, the matching principle does not work here. The expenses simply do not match the benefits gained from these assets. The standard IAS 16 Property, Plant and Equipment defines the useful life as either: · The period over which an asset is expected to be available for use by an entity, or · The number of production or similar units expected to be obtained from the asset by an entity. Now this is e...