SAIPA PE Practice Questions - SAIPA Professional Evaluation (PE) Exam

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Under IFRS for SMEs Section 17 (Property, Plant and Equipment), how is depreciation accounted for when an asset's residual value increases to an amount equal to or greater than its carrying amount?

Depreciation charge is zero until the residual value subsequently decreases below carrying amount Depreciation continues at the historical rate regardless of residual value The asset must be written off to profit or loss immediately The asset is reclassified as investment property

Correct Answer:

Depreciation charge is zero until the residual value subsequently decreases below carrying amount

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