Question

Revaluation system of depreciation should be used:

• A. In case of big size assets
• B. In case of assets which are subject to normal wear and tear
• C. Where the asset is represented by a large number of small and diverse items of small unit cost
• D. Where the amount invested in asset is pretty large

Answer 1

Answer: (C)

Where the asset is represented by a large number of small and diverse items of small unit cost

Option C is the correct one.

Revaluation method of depreciation. The value of the asset on which depreciation charge is to be calculated and assessed both at the start and at the end of the year and any revaluation losses arising during the year are considered as the depreciation charge.