Question
Cost of asset 1/1/20X1R500 000Estimated useful life 1/1/20X110 yearsDepreciation methodStraight lineAsset was available for use as intended by management on 1/1/20X1 but only used from1/2/20X1.
Cost of asset 1/1/20X1R500 000Estimated useful life 1/1/20X110 yearsDepreciation methodStraight lineAsset was available for use as intended by management on 1/1/20X1 but only used from1/2/20X1. The reporting date of the entity is 31 December.On 30 June 20X4, major inspection costs were incurred of R50 000. It is not expected thatfuture inspection costs will differ significantly from this amount. Major inspections will be carried out every two years in the future (i.e: next inspection cost will be incurred on 30 June 20X6)
However urgent major inspections of R40,000 have been carried out before the inspection date. how to treat this?
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