1. avatar says

    Refering to Downloadable notes pg 183 of 242 IAS 40, it says “property under construction or development for future use as IP should be accounted for under IAS 16 until completion. On completion it shud be treated as an IP”

    IAS Plus states however, “In May 2008, as part of its Annual Improvements Project, the IASB expanded the scope of IAS 40 to include property under construction or development for future use as an investment property. Such property previously fell within the scope of IAS 16.”
    Ellaborate difference or update notes accordingly.

    Kindly respond promptly

  2. avatar says

    Hi Mike,

    I have a question regarding IAS 20 (pg 58) the last point.
    Does it mean that the additional depreciation due to the increased asset carrying value should be expensed off?

    Looking forward to your prompt reply. Thanks!

      • avatar says

        @MikeLittle, Thanks for your reply.
        But I’m not asking about the revaluation, what I ask is about when the GGs related to asset become repayable, because when I read that sentence, it seems like saying that the increased asset carrying value should be expensed, but not the depreciation.
        So, did I misunderstand it and what is the fact?

      • Profile photo of MikeLittle says

        @ngle8393, Ah sorry. My understanding of that is that, if the grant has to be repaid, the double entry will have to be Dr Deferred Income Account ( if that’s where the remainder of the grant is located ) Dr TNCA ( with the balance of the repayment ) and Cr Cash

        After that entry takes care of the repayment and the restoration of the asset back towards a grant-free figure, then depreciation will need to be recalculated on the newly revised asset amount over a newly revised estimated useful life

        The only other matter is whether we need to make a prior year adjustment and I believe we do to bring the net asset value down to the level it should have been if the grant hadn’t happened.

  3. avatar says

    Hi Mike,

    Would like to ask on page76 Example2.
    The revision of the term of the scheme resulted in an additional obligation of $ 60,000 of which one third related to former employee.
    Does it relevant for us to calculate the interest cost? As it revised on 1/1/10 which suppose has impact to the opening balance?

    • Profile photo of MikeLittle says

      @kiwikwan, Hi, yes, the net interest cost is based n the net deficit brought forward as adjusted for the additional 60,000 – as you correctly point out, the additional 60,000 specifically took place at the start of the year.

      Have I not done that in the printed solutions? – It’s some time since I looked at the answers

      • avatar says


        Thanks for your prompt reply.
        The net interest cost shown in answer is $131,000*8% ($1,046,000-$915,000) which is not included the PSC $60,000.

  4. avatar says

    Dear Mike,

    I have a question on Financial Instruments.

    The notes (pg.143) states that: Initial measurement; “all financial instruments to be measured at fair value inclusive of transaction cost”

    Technical Article by Tony Sweetman (ACCA 2011) states: Initial recognition at fair value is normally cost incurred and this will exclude transaction costs, which are charged to profit or loss as incurred.

    The question is: Are transaction costs inclusive or exclusive when measuring fair value?

    Thank you in advance,

    • avatar says


      The technical article under FVTOCI states: Initial recognition at fair value would normally include the associated transaction costs of purchase.

      So according to Technical Articles – (my understanding)
      FVTPL – Exclude transaction costs
      FVTOCI – Include transaction costs

  5. avatar says

    On employee benefits page 73 state psc should be expensed in the year of scheme change whether they relate to current employees or not – Lecture states psc for current employees should be expensed over remaining pension earning life of current employees – which is correct—

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