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What the examiner did was subtract the Value of NCA from the Sale Proceeds to calculate the profit.
and i have gone through ur previuos threads and u told – However in financial accounting, the recorded profit when anything is sold (whether it is the same of just one asset or of all the assets) is always the difference between the sale proceeds and the NBV (the balance sheet value) of the asset(s) sold. This is the standard financial accounting treatment as examined in Papers FA, FR and SBR, and this question is asking for one of the financial accounting statements.but when i asked bing copilot ai-No, this statement is not correct. As I explained before, the profit or loss on disposal of an asset is calculated as the difference between the sale proceeds and the carrying amount of the asset, not the net book value
i am confused now sir
also from earlier threads i got to know the debt and asset are always valued in book value and not market value in sofp- is true in all the cases sir?
is there any other rules regarding financial accounting like these of fs i should be knowing?if yes can u please tell them.i have no enough time to get back into FA AND FM as am writing afm in this march.
Thank you
its surprising u r taking so long to reply, Are you fine sir?i hope nothing has happend to you :)take care sir
I don’t know how accurate or not Bing AI is (why do you not use our AI? 🙂 )
However the terms ‘carrying value’ and ‘net book value’ both mean the same (carrying value is the more current term used) and profit on sale of a non-current asset is always the different between the sale proceeds and the carrying value / net book value.
As regards other knowledge from Paper FM and financial accounting papers is concerned. Obviously everything from Paper FM is relevant (except for the management of working capital). For financial accounting, it is really the relevant knowledge for reconstructions that is needed. I do work through a reconstruction in my free lectures, but otherwise best is to remind yourself by attempting past exam questions (and asking here is anything does not make sense).
sir what about equity do we record this also in bv or mv?
if bv ,why do we use mv of equity while calculating gearing.if not in bv ,why is it not?i know these are silly dumb doubts,but brain is messed up,sorry and thankss
In financial accounting, gearing is measured using the values in the SOFP.
However in financial management, it is better measured using market values because the market values are a truer measure of the value of the equity and the debt. The SOFP values (i.e. the book values) do not show the true values.
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