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It was an OTQ, although the value of the right of use asset ($ 1,820,000) was included in the options, the correct option was the gains on the rights transferred ($ 120,000).
The following is the full answer given in the back:
The correct answer is: $120,000
IFRS 16 requires that, at the start of the lease, Sidcup should measure the right-of-use asset
arising from the leaseback of the building at the proportion of the previous carrying amount of
the building that relates to the right of use retained. This is calculated as carrying amount x
discounted lease payments/fair value. The discounted lease payments were given in the question
as $2.1 million.Sidcup only recognises the amount of gain that relates to the rights transferred.
Stage 1: Gain is $3,000,000 – $2,600,000 = $400,000
Stage 2: Gain relating to rights retained $(400,000 x 2,100,000/3,000,000) = $280,000
Stage 3: Gain relating to rights transferred $(400,000 – 280,000) = $120,000
ALL thanks to opentuition lectures and notes, i was able to score a staggering 98%.
yes, I had worked through the OT lectures and study notes, and the concept was clear from it.
however, one of the question from the latest FA 2021 BPP study text had me confused.
Illustration3: Computation of trading profits and TTP (pg 559)
since the question is very long, I will just type out the relevant information necessary for the computation of the capital allowance.
(7) plant and machinery
On 1 April 2021 the tax written down value of the mainpool was £22,500. The following transactions took place during the year ended 31 March 2022:
10June 2021 Purchased general plant- £20200
25January 2022 Sold a van (original cost £17,000)- (£11500)
15March2022 Purchased a motor car CO2 emissions 48g/k- £10600Here instead of using the 130% super deduction for the general plant, AIA of 100% is taken instead.
Thank you opentuition and sir John Maffot, I gave my exam today and passed with 85%.
And happy new year to all!!!MommyandDaddy wrote:We are HAVING DOUBTS AND THAT’S WHY WE ARE ASKING OUR DOUBTS. We want a written answer; hence please don’t not reply by telling that:
Stop being disrespectful, he did clear the doubt.
