Cumulative catch-up method, Taxation

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Mann Limited purchased machinery  on 1 January 20.9, on which date it was estimated to have a useful life of 5 years and a nil residual value. The carrying amount on 31 December 20.10 was:

Cost (1/1/20.9)                                                                                         R500 000

Accumulated depreciation                                                                          R200 000

Net carrying amount (31/12/2010)                                                             R300 000

On the 1/1/20.11, the remaining economic useful life was estimated to be 2 years.

REQUIRED

Disclose the change in estimate using the re-allocation method.

Disclose the change in estimate using the cumulative catch-up method.


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