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A company purchased second hand machinery on 1st January 2017 for 300000 subsequent?
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A company purchased second hand machinery on 1st January 2017 for 3000...
Accounting treatment for second hand machinery purchased on 1st January 2017

When a company purchases a second-hand machinery, the accounting treatment is different from purchasing a brand new machinery. Here is the accounting treatment for second-hand machinery purchased on 1st January 2017 for 300000.

Initial recognition
- The company should record the machinery in the balance sheet as a non-current asset.
- The cost of the second-hand machinery should include its purchase price and any additional costs necessary to bring it to its present location and condition.

Depreciation
- The company should depreciate the machinery over its useful life.
- The useful life of the machinery should be estimated based on its expected usage and wear and tear.
- The depreciation method should be chosen based on the best representation of the machinery's consumption of benefits.
- The company should record the depreciation expense in the income statement and reduce the carrying amount of the machinery in the balance sheet.

Subsequent measurement
- The company should periodically review the useful life and residual value of the machinery and adjust the depreciation method accordingly.
- The company should also test the machinery for impairment whenever there are indications of impairment.
- If the carrying amount of the machinery exceeds its recoverable amount, the company should recognize an impairment loss in the income statement and reduce the carrying amount of the machinery in the balance sheet.

Conclusion
In conclusion, purchasing second-hand machinery requires a different accounting treatment as compared to purchasing new machinery. The company should record the machinery as a non-current asset, depreciate it over its useful life, and periodically review its useful life and residual value.
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A company purchased second hand machinery on 1st January 2017 for 300000 subsequent?
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