Question #2. An assest was purchased for $100,000 on 1 January 20X5 and straight line depreciation of $20,000 pa is being charged (five years life, no residual life). The annual review of the assets lives is undertaken and for this particular asset the remaining useful life as at 1 January 20X7 is eight years .

The financial statements for the year ended 31 December 20X7 are being prepared.

What is the depreciation charge for the year ended 31 December 20X7?