The International Accounting Standards Board had issued this Exposure draft of Clarification of Acceptable Methods of Depreciation and Amortisation in December, 2012.

The Exposure Draft of the proposed amendments has been issued to clarify that a revenue-based method should not be adopted by the entity to allocate the depreciable/amortisable amount of an asset on a systematic basis over its useful life because that method reflects a pattern of economic benefits being generated from the asset, rather than the expected pattern of consumption of the future economic benefits embodied in the asset. The proposed amendment also provides some further guidance in the application of the diminishing balance method.

Invitation to comment

ASB invites comments on the said Exposure Draft from the public. The downloadable version of the Document is available at: http://www.ifrs.org/Current-Projects/IASB-Projects/Depreciation-and-Amortisation/Exposure-Draft-and-comment-letters-%5bDec-2012%5d/Documents/ED-Clarification-of-Acceptable-Methods.pdf

Comments would be most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording.

Comments should be submitted in writing to the Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi-110002, so as to be received not later than February 15, 2013. Comments can also be sent by e-mail at asb@icai.org or edcommentsasb@icai.org.