CIMA F1 Syllabus B. Financial Statements - Componentisation - Notes 4 / 7
Various components of an asset to be identified and depreciated separately if they have differing patterns of benefits.
Materiality is used primarily for determining the component parts of PPE.
If a significant component is expected to wear out quicker than the overall asset, it is depreciated over a shorter period.
Then any restoring or replacing is capitalised.
This approach means different depreciation periods for different components.
Examples are land, roof, walls, boilers and lifts.
So the depreciation reflects the effect of a future restoration or replacement.