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Can I keep fully depreciated assets while being used?

We are a small trucking company with a fleet of 20 trucks which are used in providing transport services and our deprecation policy is at 20% a year on cost under straight line method. With this years depreciation charge, the fleet will be fully depreciated. But it appears that we can use the trucks for another 02-03 years as they are in good condition. My question is whether it is allowed by IFRS to keep the fully depreciated assets while they are being used.

asked Oct 16, 2014 in IAS 16 - Property, Plant and Equipment by anonymous

2 Answers

0 votes
Yes, you can kept the fully depreciated assets in your book so long the derecognition criteria as per below were not met:

IAS 16.67
The carrying amount of an item of property, plant and equipment shall be derecognised:
(a) on disposal (i.e. sold); or
(b) when no future economic benefits are expected from its use or disposal. (i.e. written off, which usually trigger by condition specified by Company policy [e.g. unusable condition])

The cost of the said PPE will be offset with the equivalent accumulated depreciation and show a zero NBV at the disclosure of the notes to account.
answered Dec 3, 2014 by anonymous
0 votes
IAS 16.51 - The residual value and the useful life of an asset shall be reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

So you should amend useful life if you are going to use your assets longer than expected.
answered Dec 3, 2014 by anonymous