Asset Valuation – Knowsia

FR – L2 – Q25 – Financial Reporting Standards and Their Applications

Disclose non-current asset movements for FAMCO LTD under IAS 16, including revaluation, depreciation, and disposals for 20X4.

Question

FAMCO LTD
FAMCO LTD had the following tangible non-current assets at 31 December 20X3.

	Cost	Depreciation	Carrying amount
	GH¢000	GH¢000	GH¢000
Land	500	–	500
Buildings	400	80	320
Plant and machinery	1,613	458	1,155
Fixtures and fittings	390	140	250
Assets under construction	91	–	91
	2,994	678	2,316

In the year ended 31 December 20X4 the following transactions occur.
(1) Further costs of GH¢53,000 are incurred on buildings being constructed by the company. A building costing GH¢100,000 is completed during the year.
(2) A deposit of GH¢20,000 is paid for a new computer system which is undelivered at the year end.
(3) Additions to plant are GH¢154,000.
(4) Additions to fixtures, excluding the deposit on the new computer system, are GH¢40,000.
(5) The following assets are sold.

	Cost	Depreciation b/f	Proceeds
	GH¢000	GH¢000	GH¢000
Plant	277	195	86
Fixtures	41	31	2

(6) Land and buildings were revalued at 1 January 20X4 to GH¢1,500,000, of which land is worth GH¢900,000. The revaluation was performed by Messrs Jackson & Co, Chartered Surveyors, on the basis of existing use value on the open market.
(7) The useful economic life of the buildings is unchanged. The buildings were purchased ten years before the revaluation.
(8) Depreciation is provided on all assets in use at the year end at the following rates.
Buildings 2% per annum straight line
Plant 20% per annum straight line
Fixtures 25% per annum reducing balance

Required
Show the disclosure under IAS 16 in relation to non-current assets in the notes to the published accounts for the year ended 31 December 20X4.

Answer

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Tags: Asset Valuation, Cost Model, Depreciation, Financial Statements, IAS 16, Inventory, Non-current Assets, Property Plant and Equipment, Revaluation, Revaluation Model
Level: Level 2

Topic: Financial Reporting Standards and Their Applications

FR – L2 – Q23 – Financial Reporting Standards and Their Applications

Prepare PPE analysis for Crest Ltd for 20X4, including revaluation, disposal, and depreciation method change.

Question

The following is an extract from the financial statements of Crest Ltd on 31 December 20X3.

Property, plant and equipment

	Land and buildings GH₵	Plant and equipment GH₵	Computer equipment GH₵	Total GH₵
Cost
On 31 December 20X3	1,500,000	340,500	617,800	2,458,300
Accumulated depreciation
On 31 December 20X3	600,000	125,900	505,800	1,231,700
Carrying amount
On 31 December 20X3	900,000	214,600	112,000	1,226,600

Accounting policies
Depreciation
Depreciation is provided at the following rates.
On land and buildings: 2% per annum straight line on buildings only
On plant and equipment: 25% reducing balance
On computers: 33.33% per annum straight line

During 20X4 the following transactions took place.
(1) On 31 December the land and buildings were revalued to GH₵1,750,000. Of this amount, GH₵650,000 related to the land (which had originally cost GH₵500,000). The remaining useful life of the buildings was assessed as 40 years.
(2) A machine which had cost GH₵80,000 and had accumulated depreciation of GH₵57,000 at the start of the year was sold for GH₵25,000 in the first week of the year.
(3) A new machine was purchased on 31 March 20X4. The following costs were incurred:
Purchase price, before discount, inclusive of reclaimable sales tax of GH₵3,000: 20,000
Discount: 1,000
Delivery costs: 500
Installation costs: 750
Interest on loan taken out to finance the purchase: 300
(4) On 1 January it was decided to change the method of providing depreciation on computer equipment from the existing method to 40% reducing balance.

Required
Produce the analysis of property, plant and equipment as it would appear in the notes to the financial statements of Crest Ltd for the year ended 31 December 20X4.

Answer

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Tags: Accounting policies, Asset Valuation, Cost Basis, Depreciation, Disposals, Financial Statements, IAS 16, Non-current Assets, Property Plant and Equipment, Revaluation
Level: Level 2

Topic: Financial Reporting Standards and Their Applications

PSAF- L2 – Q10.4 – International Public Sector Accounting Standards

Determine recoverable amount of three intangible assets for Nandom Technical University.

Question

The following information relates to three intangible assets in respect of Nandom Technical University.

	Brands (GHC)	Software (GHC)	Trade Marks (GHC)
Carrying amount	200,000	300,000	240,000
Net realisable value	220,000	250,000	200,000
Value in use	240,000	260,000	180,000

Required:
(a) What is the recoverable amount of each asset?

(b) Calculate the impairment provision for each of the assets.

Answer

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Tags: Accounting Standards, Asset Valuation, Financial Reporting, Impairment, Impairment Loss, Intangible assets, IPSAS, Non-current Assets, Public Sector Accounting, Recoverable Amount
Level: Level 2

Topic: International Public Sector Accounting Standards

Tag (SQ): Asset Valuation

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FR – L2 – Q25 – Financial Reporting Standards and Their Applications

Disclose non-current asset movements for FAMCO LTD under IAS 16, including revaluation, depreciation, and disposals for 20X4.

FR – L2 – Q23 – Financial Reporting Standards and Their Applications

Prepare PPE analysis for Crest Ltd for 20X4, including revaluation, disposal, and depreciation method change.

PSAF- L2 – Q10.4 – International Public Sector Accounting Standards

Determine recoverable amount of three intangible assets for Nandom Technical University.

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FR – L2 – Q25 – Financial Reporting Standards and Their Applications

Disclose non-current asset movements for FAMCO LTD under IAS 16, including revaluation, depreciation, and disposals for 20X4.

You're reporting an error for "FR – L2 – Q25 – Financial Reporting Standards and Their Applications"

FR – L2 – Q23 – Financial Reporting Standards and Their Applications

Prepare PPE analysis for Crest Ltd for 20X4, including revaluation, disposal, and depreciation method change.

You're reporting an error for "FR – L2 – Q23 – Financial Reporting Standards and Their Applications"

PSAF- L2 – Q10.4 – International Public Sector Accounting Standards

Determine recoverable amount of three intangible assets for Nandom Technical University.

You're reporting an error for "PSAF- L2 – Q10.4 – International Public Sector Accounting Standards"

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