Question

Consistent with AASB 116 the costs of facilities that are depreciable assets associated with an area of interest should be:

Select one:
a. depreciated over the life of the area of
interest for which they were acquired unless they can be transported to another
site or can otherwise be of further use not necessarily connected with any
particular area of interest, in which case they should be depreciated over
their own specific useful lives.
b. depreciated over the expected life of the
associated mining rights.
c. depreciated using a method that matches the
recovery of future benefits and the pattern of revenue streams generated by the
area of interest.
d. depreciated using a method that matches the
recovery of future benefits and the pattern of revenue streams generated by the
area of interest.

Answer 1

As per AASB 116 the cost of facilities that are depreciable assets associated with an area of interest should be :

a. Depreciated over the life of the area of interest which they were acquired unless they can be transported to another site or can otherwise be of further use not necessarily connected with any particular area of interest, in which case they should be depreciated over their own specific useful lives.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated seperately.