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Ice Queen bought a new refrigerated delivery truck. The engine has a useful life of 3 years, the refrigeration unit has a useful life of 2 years, and the body of the truck has a useful life of 10 years. Under IFRS, how many assets should Ice Queen record?

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Answer:

Under IFRS, Ice Queen would record three separate assets for the truck, based on the different useful lives of the engine, refrigeration unit, and truck body.

Step-by-step explanation:

Under International Financial Reporting Standards (IFRS), Ice Queen should recognize each component of the truck with a different useful life as a separate asset when accounting for depreciation purposes. Therefore, Ice Queen will record three separate assets: one for the engine with a useful life of 3 years, one for the refrigeration unit with a useful life of 2 years, and one for the truck body with a useful life of 10 years. The separate accounting ensures the depreciation of each component is accurately represented in the entity's financial statements.

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