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Yes but this company uses the cost model and let many of its assets get to zero value without ever reassessing it nor revised its useful life. You are right as to that they should have never let this situation happen of letting the values reach to zero. But it has happened.. Now they cannot revise its useful life at this moment because the net book value is zero. Whether they make it 10 years or 20 years, etc. the depreciation would be zero as the numerator is zero.
So, the only option left is to revalue its assets?
And also just an added note, I understand that even if assets are fully depreciated, a company can still use it. I mean, depreciation is an accounting tool only, but still, if its fully depreciated and still in use, then shouldn’t it be revalued OR if it is close to being fully depreciated, then shouldn’t the useful life be revised?
Thank you for the in depth helpful reply Trephana! So what u said should discussed in any form in sls which is relevant for me. I understood clearly now, Thanks a lot. So since i am not changing my topic or company, there is no need of an additional meeting. That means my SLS Q1 will be like, First meeting:….. Second Meeting:…. Third meeting:….., Same as before right? No extra heading to add
Hello Trephena,
I am resubmitting SLS for the 2nd time this session. I want to know that according to OBU, we must have an additional meeting with the mentor if SLS is to be resubmitted. So, my doubt is whether that extra meeting should be discussed in the SLS Question 1? If so, wont that significantly increase the word count?
Secondly, what exactly should I discuss in the Resubmission statement, given the fact that only Q1 and Q2 had some issues?
Good Afternoon,
I am resubmitting SLS for the 2nd time this session. I just wanted to know that according to OBU, we must have an additional meeting with the mentor if SLS is to be resubmitted. So, my doubt is whether that extra meeting should be discussed in the SLS Question 1? If so, wont that significantly increase the word count?
Secondly, what exactly should I discuss in the Resubmission statement, given the fact that only Q1 and Q2 had some issues?
Is British Telecom Group and competitor Sky PLC suitable companies to choose for RAP Topic 8?
I saw some of the answers in relation to “state the audit evidence you expect to find”.
Few answers include like ‘Observation of the procedure being performed’ , ‘Physical inspection of the asset’, etc.
How can such evidence be found on an audit file? Aren’t these procedures?
Yes thank you I got the idea of it
But zero marks for that mistake! :O
That’s a little harsh dont you thinkOh, and the special valuation technique is usually the option pricing model right?
This intrinsic value to be remeasured every year will only be for cash settled deferred consideration?
Not for equity settled correct?Okay, so the option pricing is used only if we don’t have a proper fair value for the shares?
Its like the 2nd alternative correct?I tried with the second method but got ($260,000) npv whereas with first method I got ($441,000) npv
Is that an issue ? :/Ohhh okay! So both methods are fine
I prefer the 2nd methodThank you! ?
Just another quick question. When a question states to estimate the value of a project, it basically means to calculate the NPV right?
Yes sir, thank you for your detailed explanation
It left no room of doubt for me at all. I was really confused in this area but now it feels really clear-cut
Thank you so much!Okay that makes sense now
So this is actually a bit complicated area for auditors to be held and proven liable in the court of law.What would the auditor do then in relation to its audit report once it is issued? He would have to re issue another one right? In that case, the client will be alerted about the fraud I guess…causing trouble for the audit firm
Also, final thing to know…can auditors be held liable to provide a wrong opinion on financial statements (whether intentionally or unintentionally).? The thing I always get confused about is that fraud and fairness of financial statements are very closely linked with each other.
Management is responsible for fraud, however auditors are responsible to provide a correct opinion on financial statements.
If a fraud occurs which is undetected, then obviously the opinion which is given will also be wrong. Although, on one hand audit firm won’t be held liable because of fraud (because it isn’t their responsibility), on the other hand, they can be held liable as they provided wrong opinion..I feel like auditors should also be ‘responsible’ to detect fraudOh…so $225,000 is written off in full
and for the $75,000, we will create a provision for doubtful debts (lets say 5%).
so we will report in SOFP at (75,000-3,750) = $71,250
I think I understood nowI did check
It isnt there
I also paid my subscription fee so I dont know..
In previous exams, ACCA always sent me e-mail exactly on time