ACC201- Financial Accounting

(iii) Demonstrate how Old Chang Kee had accounted for its PPE by describing the following: How does the business depreciate its PPE? State the range of useful lives of the PPE. Discuss any matter that may be material to an external stakeholder, regarding the PPE. (4 marks)

Old Chang Kee depreciates its Property, Plant and Equipment through straight line basis over the estimated useful lives of the assets.

1. Buildings has a useful life of over the lower of the remaining lease terms or 50 years
2. Machinery and equipment have a useful life of 5 years to 10 years
3. Motor Vehicles has a useful life of 5 years
4. Renovation has a useful life of over the lower of the remaining lease terms or 3 years to 5 years
5. Electrical Fittings has a useful life of over the lower of the remaining lease terms or 5 years to 10 years
6. Furniture has a useful life of 5 years to 10 years
7. Computers have a useful life of 5 years