Question

There are many different ways in which the recorded cost of a capital asset may be changed or altered. This can come from the sale, retirement, or destruction of the asset. Reductions can also pertain to a specific part of an asset such as a wing of a building being demolished but not the whole building. If the Cost reduction is due to the transferring of capital assets between funds with the same reporting entity, both historical cost and accumulated depreciation should be included. These cost reductions are much simpler to keep track of when they pertain to the whole assets and when adequate records have been kept. It is Important that when these partial cost reductions are made that there is a detailed description of where this change comes from. In my pinion I feel like cost reductions for portions of an asset could lead to disparity between estimations and record keeping. Does anyone have an idea on how to keep these partial cost reductions accurate and consistent?

Answer 1