[hanningtonsserwadda]

Then candidates are likely to make different estimates. Does that mean there’s an error in the question? Because we depreciate starting from the time the asset is put to use. What if I assume that it was started and completed during the year then put to use the next year? Am I wrong if I make that assumption because the examiner has not stated the exact date the plant was put to use. Thank you

[hanningtonsserwadda]

Thank you.

[hanningtonsserwadda]

Thanks. This finance income do we recognise spread it over the three years? Or show a recognition of it all at once

[hanningtonsserwadda]

Hahaha. Thanks

[hanningtonsserwadda]

Thank you Stephen

[hanningtonsserwadda]

As I was reading through the standard, I came to know that ancillary costs like application fees and the loan insurance costs are also borrowing Costs. Should such costs be added to the loan amount when calculating borrowing Costs to be capitalized or instead they should be expensed. But remember the costs to be capitalized are those are directly attributable to the constructing of the qualifying costs ( that are are avoidable had there been no construction of the qualifying asset. Some clarification here.

Thanks Stephen

[hanningtonsserwadda]

Thank you very much Stephen

[hanningtonsserwadda]

Thank you very much.

[hanningtonsserwadda]

Yeah. Use the all profit on sale of $20,000. After adjust retained earnings of the seller and group PPE with the profit less extra depreciation.

[hanningtonsserwadda]

If it is disposed of then no need of classifying it as held for sale. Just write it off.

However for it to be classified as held for sale, the conditions for classification under IFRS 5 would have to be met.

[hanningtonsserwadda]

Capitalization is the method of recognizing the cost incurred as an expenditure which is capital in nature or recognizing such expenditure as an asset of the business.

Recognition is the process of incorporating in the SOFP or SOP/L an item that meets the definition of an element of financial statements and meets the recognition criteria

[hanningtonsserwadda]

Thank you very much

[hanningtonsserwadda]

Thanks Key Master

[hanningtonsserwadda]

There seems to be a mistake in the original answer.
The first mistake is on the computation of the bonus issue of shares. According to the solution above they are using 1/3 on the weighted 18,000 shares. it should have been on 19,000 shares ie 1/3 × 19,000shares). The 19,000,000 shares is the balance b/d (15,000,000) + full market price issue of 4,000,000.

The number of shares existing before the bonus issue should be adjusted by the bonus fraction of 4/3 to assume that bonus shares have always been in issue.

[hanningtonsserwadda]

Iam grateful. Thanks alot keymaster

[hanningtonsserwadda]

Thanks OpenTuition Tutor

[hanningtonsserwadda]

Great, Thanks alot. I had got that right. Thanks.
Open tuition team.

[hanningtonsserwadda]

Okay. Thanks. Let me work it out.

[hanningtonsserwadda]

I don’t think we should transfer the loss to revaluation reserves unless it is a reversal of a previous loss for the same asset.

[hanningtonsserwadda]

ok thanks mr john. i was going through some questions for company accounts mainly the calculations related to shares only that the way how that question was examined is different from the others that i have tried out.

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