- 14 Marks
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.
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