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WorkpaperIAS 16 — Property, Plant and EquipmentL2 · L3 · L4

Useful life and residual value

2 missions9 sections to document40 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

Review the useful life and residual value at year-end: document the factors considered, conclude on each estimate and, if revised, calculate the revised charge prospectively from the carrying amount at the date of the change. No entry is recorded here: the charge is recorded in the depreciation workpaper.

9 sections · 19 blocks · 1 calculation · 0 entries

  • IAS 16 §6
  • IAS 16 §51
  • IAS 16 §53
  • IAS 16 §54
  • IAS 16 §56
  • IAS 16 §57
  • IAS 16 §76

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Printing press: revision of estimates
Case tasks documented here
  • What is the nature of the revision of useful life and residual value? How is it applied?
  • What information is missing to estimate the residual value, and what assumption do you make?
  • Calculate the revised 20X4 charge and the effect of the change in estimate on the period.
  • Assess the financial controller's four proposals, including the change in depreciation method.
1

Inputs

Inputs

  • Asset reviewed and context of use

    TextRequired

  • Date of the review (at least at each year-end)

    DateRequired

  • Useful life applied so far

    NumberRequired

    10 years

  • Residual value applied so far

    NumberRequired

    50,000

  • Carrying amount at the date of the change

    NumberRequired

    645,000

  • Revised remaining useful life

    NumberRequired

    4 years

  • Revised residual value

    NumberRequired

    20,000

2

Supporting evidence

Evidence

  • Evidence obtained and referenced (category, document reference)

    EvidenceRequired

3

Factors considered

Analysis

IAS 16 §51IAS 16 §56IAS 16 §57

  • Factors considered for the useful life

    ChecklistRequired

    • Expected usage (capacity, output)
    • Expected physical wear and tear
    • Technical or commercial obsolescence
    • Legal or similar limits on use
4

Change in a dismantling liability

Analysis

IFRIC 1IFRIC 1IFRIC 1IFRIC 1

  • Nature of the change

    Choice

    Estimated outflow of resources / Discount rate / No change

  • Effect on the cost of the asset and future depreciation

    Text

5

Prospective effect

Calculations

IAS 16 §51

  • Revised annual charge

    CalculationRequired

    156,250

    Carrying amount at the date of the change ; Revised residual value ; Revised remaining useful life

6

Estimation judgments

Judgment

IAS 16 §6IAS 16 §51IAS 16 §53IAS 16 §54IAS 16 §57

  • Useful life

    JudgmentRequired

    Estimate confirmed / Estimate revised (change in estimate)

  • Rationale: facts relied on, analysis, alternative rejected

    TextRequired

  • Residual value

    JudgmentRequired

    Estimate confirmed / Estimate revised (change in estimate)

  • Rationale: facts relied on, analysis, alternative rejected

    TextRequired

7

Conclusion

Conclusion

  • Conclusion: estimates retained and any change in estimate

    ConclusionRequired

8

Disclosures

Disclosure

IAS 16 §76

  • Change in estimate

    ChecklistRequired

    • Nature and effect of the change in estimate (current and future periods)
9

Normative references

References

  • Paragraphs cited in this workpaper (verification status shown from the registry)

    References

10

Checks and financial statement impact

  • The revised charge is determinedPass
Assets
0
Liabilities
0
Profit or loss
0
OCI
0
Equity
0