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Sir, in the calculation of amortized cost, the effective rate of interest is debited in the Inc. Statement. Is there an actual payment of finance cost here? The idea behind amortized cost is to spread the cost of borrowing over the period of the liability to give a fair reflection. But if the interest is not paid actually, how is it giving a true reflection of the company’s transactions?
Any time we apply the concept of time value we are (except by coincidence) moving away from reality. But you can say the same about accruals and prepayments, depreciation, and every other accounting area that requires estimation.
The point is that, as a result of that estimation, the figures are more representative of reality than if we simply ignored the matter being estimated.
Agreed?
Sir,
opening value of deffered tax asset or liability is 0. PPE is revalued from 200000 to 250000 at 30 june 2014.
at 30 june 2015 what will be the value of deffered tax asset or liability if any.
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