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I would like to know at which rate we should depreciate a demo vehicle at a dealership?


While testing the depreciation written off on a demo vehicle at a vehicle dealership I wondered what the most appropriate rate of depreciation would be?  Demo vehicles consist of a various number of makes and models

asked Dec 3, 2014 in IFRS for SMEs by anonymous

1 Answer

0 votes
The depreciable amount of an asset shall be allocated on a systematic basis over its useful life. The rate & method is therefore judgmental & can be decided by the management. he depreciation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity.

Useful life is:
(a)the period over which an asset is expected to be available for use by an entity; or
(b) the number of production or similar units expected to be obtained from the asset by an entity
answered Dec 13, 2014 by anonymous


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