The depreciable amount equals:
AMarket value at year end
BCost plus residual value
CSelling price of asset
DCost less residual value
Answer & Solution
Correct answer: D. Cost less residual value
1. Depreciable amount = cost (or substituted amount) less estimated residual value.
2. This is the total amount to be allocated as expense over useful life.
3. Market or selling values do not enter the depreciation formula.
_Source: ICAI BoS Foundation Paper 1, Ch 5 "Depreciation & Amortisation", §1.1 def_
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