A matter of appreciating depreciation
Article Abstract:
About 20% of nonfinancial companies making up the Financial Times Stock Exchange 100 Index do not depreciate certain assets. These firms forgo depreciation for different reasons. The retailing, brewing, and hotel and leisure industries justify non-depreciation by claiming the residual asset values at least equal book value as a result of regular maintenance spends on freehold and long leasehold retail premises. Water utilities do not depreciate infrastructure assets because their limitless economic life implied by the regulatory and commercial demands that these assets be maintained perpetually. In investment properties, asset depreciation is not practiced because they are exempted from doing such under Statement of Standard Accounting Practice No. 19. The possible impact of mandatory asset depreciation on these and other companies is explored.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1995
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Deferred tax - a case for consistency
Article Abstract:
The Accounting Standards Board's recently issued discussion paper, 'Accounting for Tax,' has resurrected the old debate on the issue of deferred tax provisioning. The document proposes a shift from the current practice of partial provisioning to full provisioning. The proposal has merit, considering the many benefits of adopting full provisioning. This method offers consistency with common international practice, less subjectivity and the conservative reporting of liabilities. In contrast, partial provisioning is rendered ineffective by the unreliable assumptions underlying any provision, the differences in the accounting treatment that this may create and the confusion that the account's readers is likely to experience with regards to the calculation of provision.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1995
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Fixed assets: costs, lives and depreciation
Article Abstract:
Estimating assets' useful lives and depreciating their value over these estimated useful lives are discussed; these processes, which form the basis of depreciation accounting, are simpler in theory than they are in practice. DEpreciation based upon asset costs is compared to depreciation methods that involve saleable values in their computations. Also compared are assets' technical and economic lives, which frequently differ significantly. The incorporation of interest rates and interest costs in calculations of asset depreciation is reviewed in detail.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1984
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