Comments

  1. avatar says

    Dear Sir,
    if an asset which is previously revalued is impaired then what is accounting treatment of this in according to IAS 6……….I also wnat to know its impact on deffered tax calculation…..

  2. Profile photo of ruthnakawooya says

    Dear Little, there was a question asked by olfavladi says:
    November 11, 2013 at 10:04 am you said that you had answer please help and just copy for us that answer i would also like to get the the answer to that question. thanks

    • Profile photo of MikeLittle says

      olfavladi posted the same question in two different threads. I can’t remember what the heading was for the other thread. In addition, I was not really happy that I was being asked to give advice about a practical matter from his employment. The site is not here to provide professional consultation. There are firms of accountants that provide such services. This site is here to assist students to prepare for and to pass their accountancy exams.

      If you wish to search through the site, you may find the earlier thread to which I have just referred but I’m not prepared to do that – I have students’ genuine questions to answer

      Sorry

  3. avatar says

    Hello,
    I’ve got a question which we can not resolve in my company.
    We acquired the intangible asset (licence) for 100 USD, partly this acquisition financed through the government grant (60 USD),
    we are going to sell this asset for 15 USD in the 1-st year and for 15 USD in the 2-d year (total benefit of 30 USD). What will be Impairment Loss when we test for impairment?
    Is it possible to include grant’s proceeds in calculation of recoverable amount?
    We account for the grant as a deferred income, separately from the related intangible asset.
    Please help me with this problem.

    • Profile photo of MikeLittle says

      Why would they wish to keep it beyond its useful life? Are they still using it? In which case, it has not reached the end of its useful life! And if, in fact, it HAS reached the end of its useful life and has been fully depreciated, then there’s nothing to do – it is no longer contributing to the activities of the company. If, getting towards the end of its originally estimated useful life, the company decides that the asset is going to last longer than first estimated, then its estimated useful life should be re-assessed and whatever carrying value remains will then be written off over its new remaining estimated useful life. And then, next year, its remaining useful life will be further re-assessed …. and again the year after, and after. In theory, it should never be fully depreciated.

      Is that ok?

      • Profile photo of questforknowledge says

        yes mike, i was asking because the furnitures and computers in my company have been fully depreciated but the company doesn’t want to dispose them off because some are still in a good state. so my boss was telling us the other day that they will be bringing in experts to revalue the computers and the furnitures. I don’t know why he calls it a revaluation because i thought it is a reassessment of the asset extimated useful life ie an extension of the useful life of the asset

      • Profile photo of MikeLittle says

        I think you’re right – it’s a reassessment of estimated remaining useful life. IF the boss revalues these written down pieces of furniture, he should ensure that ALL assets in that class are reassessed / revalued. He should not “cherry pick”

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