Long time stalker, first time poster.
I'm currently studying Level 3 and would like some clarification regarding depreciation, if you kind folks could help me.

I'm looking at some exam questions/answers and have stumbled on this:
In both of the following Q's, a full year's depreciation is charged in the year of acquisition and none in the year of disposal.

1) Financial year ending 31/08/16
Date/tax point on purchase invoice 25/08/16, invoice paid in full on 30/08/16.

In the answer, the date of acquisition is 25/08/16, ie. the invoice date (no problem there), and then a full year's depreciation is charged for the year ending 31/08/16 (6 days later). This is exactly what I would expect given the perimeters of the Q. My confusion comes with the next Q:

2) Financial year ending 31/10/13
Date of acquisition of non-current asset 30/10/13.

GIven exactly the same perimeters as the last Q, I would expect there to be a full year's depreciation charged on 31/10/13 (1 day later). In the answer, however, the first year's depreciation is calculated for the year ending 31/10/14. Now, in the real world I get that this would make the most sense, or at least in some sort of pro-rata arrangement (if the date of acquisition is close to the end of the financial year), but how does that make sense in this specific scenario?

Am I overthinking this? (probably). Any help would be appreciated,

TL;DR, If a full year's depreciation is charged in the year of acquisition, does it matter how close the date of acquisition is to the end of the financial year?

(Ps, ignore the category, it wouldn't let me pick level 3 AQ 2016)


  • luappaul
    luappaul Registered Posts: 4
    It's from my course provider's own material. There is numerous errata sent out with pretty much all of the books, so it wouldn't surprise me if it was a mistake. It was driving me a little mad trying to work out if I knew what I needed to know as I've got the exam coming up, hence this post. Tbh I just wanted confirmation of what I already thought. Thanks for removing doubts from my mind.
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