If the fair value of a depreciable asset is greater than the carrying amount, in the years subsequent to the acquisition date the depreciation expense recorded in the books of the subsidiary will be greater than that for the group.

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If the fair value of a depreciable asset is greater than the carrying amount, it means that the asset has appreciated in value since its acquisition. However, this does not affect the depreciation expense recorded in the books of the subsidiary or the group. Both will continue to use the same depreciation method and rate, based on the asset's original cost and useful life, regardless of any increase in fair value. Therefore, the depreciation expense recorded in the books of the subsidiary will not be greater than that for the group in subsequent years.

If the Fair Value of a Depreciable Asset Is Greater