# Q5 of Non current assets from Mini Exercises

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This topic contains 3 replies, has 2 voices, and was last updated by  MikeLittle 1 year, 1 month ago. This post has been viewed 14 times

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c0712
Participant

I really don’t get why it’s 300 for impairment. Isn’t that 2.8 m?

And for all the mini questions in this section, extracts are asked, but accounting treatments are given in answers (my understanding). If I don’t show accounting treatments and only calculated the figures to go into SoI and SoFP, will I score?

Thank you Mike!

#106979

MikeLittle
Moderator

300k? The value of the leasehold property at the end of this year is 24.9m. The value of the leasehold property at the end of the previous year was 25.2m. And you cannot see where 300k comes from?

IF we had depreciated the lease over its remaining 14 years, the depreciation charge for 2010 would have been 1.8m Deduct that amount from the 25.2m brought forward and we arrive at 23.4m

Now we’re told that the property is valued at 24.9m at the end of this year so unimpair from 23.4m back up to 24.9m by the amount of 1.5m. So, in summary, depreciate by 1.8m and set against that the unimpairment of 1.5m gives a net charge to this year’s Statement of Income of 300k

Extracts are asked for because these are paragraphs lifted from past exam questions. There is no way that Steve Scott is going to ask you a similar question in isolation. He WILL ask similar tasks, but only in the context of a 25 mark “Preparation of financial statements” question

#106980

c0712
Participant

Ah! Got it! Many many thanks!

#106981

MikeLittle
Moderator

Welcome

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