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      Question

      As per Ind AS 16 / AS 10, the residual value of a

      tangible fixed asset should be:
      A Ignored for depreciation calculation Correct Answer Incorrect Answer
      B Considered as its market value at the end of its useful life Correct Answer Incorrect Answer
      C Its estimated value in the condition expected at the end of its useful life Correct Answer Incorrect Answer
      D Always taken as 5% of the original cost Correct Answer Incorrect Answer
      E Reviewed only at the time of asset purchase Correct Answer Incorrect Answer

      Solution

      Ind AS 16 defines residual value as "the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life." It must be reviewed at least at each financial year-end.

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