Depreciation for replaced components follows it's individual useful life or remaining useful life of existing machinery?

Accountancy

If, The new turbine which costs 450 has a useful life of 10 years. But the remainder components has Remaining life of 4 years. Whether we need to depreciate the new turbine cost for 10yrs or 4yrs? As per depreciation on addition/extension to existing PPE, we check if the addition/extension can be used independently or not, and has seperate identity.? And compute the depreciate accordingly. Should I apply this criteria for the new turbine? [Video Time Stamp: 08:36] Video Details ------------- P1 - Accounting Standards - CA Inter AS 10 - PPE #12. Illustration - Bharat infrastructure Ltd.

Geeta B

CA Inter

★ 9K+

29-Apr-26 18:05

112

Answers (2)

Depreciation subsequently is based on useful life assessment. If the management believes that the component can be used/sold separately, then depreciation will be accordingly computed.

CA Suraj Lakhotia

Admin

05-May-26 11:40

Ok sir thank you

Thread Starter

Geeta B

CA Inter

★ 9K+

08-May-26 10:17