We purchased some machine for $43000/= two years ago & started depreciating at an annual rate of 10%. But it seems this machine can not be used for more than 04 years more due to changes in technology. What should be the accounting treatment for this? Can I depreciate the remaining Net Book Value at 25%?
No, you can’t Depreciating the current net book value over the 04 years is not the correct accounting treatment. Since you say you expect the technology to be changed in 04 years, it is an indication of an impairment loss. In other words machine’s carrying amount is likely to be in excess of the greater of its net selling price and it’s value in use