Question
Under IFRS, companies need to calculate amortization separately for the major components of an amortizable asset. Does this provide better information for the users of
Under IFRS, companies need to calculate amortization separately for the major components of an amortizable asset. Does this provide better information for the users of financial information? Why or why not?
Many users are interested in knowing the useful life of a building or a piece of equipment because of the implications on (accounts receivable / accumulated amortization / capital / cash flow / loans payable) for a company. As the asset gets older, it will have to be replaced, which will affect a company's (accounts receivable / accumulated amortization / capital / cash flow / loans payable). By amortizing significant components separately, users will have a better picture of (collections from customers/ future replacement costs / payments to creditors / payments to shareholders ).
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