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2. What sources are reliably used to estimate an asset's useful life?
Weegy: The purpose of the standards concerning the recognition of assets and the allocation of depreciable amount is made clear in AAS4 / AASB 1021 (clause 3.1.1) which reads: ‘The establishment of recognition criteria for assets with physical substance [ that are expected to be used during more than one period and the establishment of accounting standards for the depreciation of non-current assets will ensure that users of general purpose financial reports are provided with relevant, reliable and comparable information about the depreciation of non-current assets for the purpose of assessing the performance, financial position, financing and investing, and compliance of the entity.’ The purpose of the application of standards relating to depreciation is to provide information that is relevant, reliable and comparable. Where the recognition of significant component/s, be they part of a complex asset or not, provide information that is relevant, reliable and comparable then their recognition is desired, that is, the information contained in an entity’s financial statement is considered relevant, reliable and comparable to users of the financial report in evaluating and making decisions about the allocation of scarce resources. ] (More)
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