CMA Study Group

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  • 1.  Part 2 Investment decision-Treatment of Salvage Value

    Posted 02-08-2021 05:49 AM
    Please help on the following:
    Is the salvage value deducted from the original cost, while calculating depreciation under straight-line method and the sum of years digit method in a capital investment projects.


  • 2.  RE: Part 2 Investment decision-Treatment of Salvage Value

    Posted 02-09-2021 02:45 AM
    Yes, salvage value is deducted from original cost
    Thanks

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    Garvit Mishra
    Supervisor
    Jaipur
    India
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    Original Message


  • 3.  RE: Part 2 Investment decision-Treatment of Salvage Value

    Posted 02-09-2021 03:32 AM
    Under the US the salvage value is not deductible when take an investment decision

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    Ahmed Ouda
    Accountant
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    Original Message


  • 4.  RE: Part 2 Investment decision-Treatment of Salvage Value

    Posted 02-09-2021 03:31 AM
    Under the US the salvage value is not deductible when take an investment decision

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    Ahmed Ouda
    Accountant
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    Original Message


  • 5.  RE: Part 2 Investment decision-Treatment of Salvage Value

    Posted 02-10-2021 02:27 AM
    Yes under US GAAP we are suppose to deduct salvage value to find depreciation. But for the CMA exam purpose and for Capital budgeting we don't require to deduct salvage value while assessing the viability of the Capital Project. 

    The salvage value of an investment is considered as one of the item in Terminal Cash Inflow. 


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    Mohammed Nadeem
    Accountant
    Vi Sigma Apparel Group FZE
    Abu Dhabi
    United Arab Emirates
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    Original Message