• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Chapter 2 Non-Current assets (recognition)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 2 Non-Current assets (recognition)

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 8, 2021 at 4:42 am #616299
    7fsa
    Participant
    • Topics: 58
    • Replies: 40
    • ☆☆

    Dear Chris,

    How are you?
    I hope you are doing well,
    it’s mentioned in Kaplan textbook and in your nice lecture you said dismantling costs should be capitalized to the assets using present value regarding this matter i have a question its mentioned in kaplan the the following data the asset costs $10 Million and would cost $4 Million to remove in 20 years , then the present value of this dismantling cost must be calculated if the interest rate is 5% and he calculated the dismantling costs which equals to $1507558 and added it to the cost of asset which is $10 Million and capitalized the total amount to the asset to become its value =$10000000+$1507558 my question is why did he capitalized just $1507558? and why don’t we capitalize the total amount of $4000000 of dismantling costs and we can get expenses for any increase in finance cost over the 20 years.

    April 10, 2021 at 8:47 am #616630
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6443
    • ☆☆☆☆☆

    Hi,

    It is capitalised at present value as that is the amount that would be paid in today’s prices, to reflect the time value of money. The asset is then depreciated over its useful life and then the provision set up of $1,507,558 is then unwound (increased) each year at 5%. The increase is treated as a finance cost through profit or loss.

    Thanks.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • shazleen on ACCA AB Chapter 10 – Management – Questions
  • John Moffat on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • John Moffat on Linear Programming – Maximum contribution – ACCA Performance Management (PM)
  • d.kabulova on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • alin.sivi on Linear Programming – Maximum contribution – ACCA Performance Management (PM)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy