[AmbitiousMe]

Yeah, it is a call option. Can’t remember what I did in exam. Does anybody remember, the premiums given on the left were premiums for call or put?

[AmbitiousMe]

Mike, you are welcome. And thank you very much for providing us free top of the range resources.

[AmbitiousMe]

Please follow the discussion on the same topic here. It might help you.

[AmbitiousMe]

I have heard some good reviews about Independent Colleges.

[AmbitiousMe]

BPP ran a refresher course last weekend for P2 students here in Ireland. I signed up for that course just to find out the answer to my this particular problem. Before I had got a chance to ask the tutor, he explained the topic. In his lecture, he did say that it used to be the way, but with the revision of the Standard, excess depreciation method was discontinued. Please see attached page of course note.

[AmbitiousMe]

Mike

I think I have found the answer to presumed justification. And it is:

Depreciation based on the new carrying value is in effect a realisation of the unrealised profit through use and therefore reduces the consolidation adjustment.
The working is

Unrealised profit on transfer X
Less: proportion depreciated by year end (X)
X

Adj in the books of the company making the sale:

DR Retained Earnings
CR PPE

[AmbitiousMe]

Thanks for your reply.

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