Whats the correct definition?

[kepal5]

Looking at the VCAA 2008 paper and the TSSM 2010 paper I found the same question but different answer.
The question is: Explain why a Loss on Disposal of Assest occurs
I usally answer is due to underdeperiaction during the life of the business due to overstating the useful life or the residual value. However the TSSM one states When the business sells a NCA the amount received for the assest is compared to the carrying value. If the amount received for the assest is less than the carrying value then a loss is said to have occured. Confusion so which one is correct?

[toshibaj]

they both mean the same thing really, but i'd go with vcaa

[JinXi]

I always tend to include "since Depreciation are based on Estimates"

But go with Vcaa. No doubt

[eeps]

they both mean the same thing really, but i'd go with vcaa

Agreed. VCAA are more reliable than TSSM.

[kepal5]

Thanks cause i was reading it I was like wtf lol thanks guise.

[Stormer]

Depreciation is merely a consequence of a previous action. I've been told to answer like this:

The loss on Disposal of an Asset occurs due to the overestimation of useful life or overestimation of residual value which leads to under depreciation over the NCA's useful life and thus the NCA is sold/traded in for lower than it's carrying value.

Notice how I still mention under-depreciation, but as a consequence of useful life/residual value. 

[eeps]

The loss on Disposal of an Asset occurs due to the overestimation of useful life or overestimation of residual value which leads to under depreciation over the NCA's useful life and thus the NCA is sold/traded in for lower than it's carrying value.

Full marks, right there.