Clarity Printers Limited bought a printing press on 1st April 2008 at a cost of 3
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Clarity Printers Limited bought a printing press on 1st April 2008 at a cost of ₹ 3 million. The management estimated the useful life of the press to be 10 years with a residual value of ₹ 200,000. The machine was depreciated using SLM till 2016–17. On 1st April 2017, based upon a technical review of the press, the management incurred a cost of ₹ 500,000 for overhauling the press. It is estimated that after overhauling, the press, will be useful for another five years and will have a residual value of ₹ 100,000.
1. How will the cost of overhauling be treated?
2. What will be the revised annual depreciation?
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Jonas Araujo
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