Tangible Non Current Asset

     1.      Capital Expenditure:

Capital Expenditure is expenditure which results in the acquisition of non-current assets, or an improvement in their earning capacity.

     2.      Revenue expenditure :

Revenue expenditure is expenditure which is incurred for either of the following reasons.  

To maintain the existing earning capacity of non current asset.

     3.      IAS -16 is for Property, Plant and equipment (Tangible non current asset) and depreciation

     4.      Depreciation:

1.      Reducing Balancing Method          2. Straight Line Method

    5.      Depreciation is charged against profit and deducted from the value of the non current asset in the      statement of financial position.

     6.      Residual value:

The residual value is the net amount which the entity expects to obtain for an asset to obtain for an asset at the end of its useful life after deducting the expected cost of disposal.

     7.      The annual depreciation charge = Cost of Asset – Residual value

   Expected useful life of the asset

    8.      Under the Reducing Balancing Method we do not deduct the residual value from the cost before     depreciating.