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ias 37 provisions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › ias 37 provisions

  • This topic has 3 replies, 2 voices, and was last updated 4 years ago by P2-D2.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • June 24, 2020 at 6:17 pm #574636
    shah19888888
    Participant
    • Topics: 20
    • Replies: 10
    • ☆

    Hello Sir,

    I just had quick question regarding depreciation of constructive liability that get capitalized.

    For example If i purchase an item for 100K

    The discounted value of the future obligation which is 50k (discounted) which gets capitalized.

    Assuming the useful economic life is 5 years, I would depreciate 150k over 5 years?

    regards

    June 27, 2020 at 3:39 pm #574813
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    Yes, you would depreciate the 150k over the 5 years. The present value of the provision is unwound through finance costs over the same five year period.

    Thanks

    June 29, 2020 at 11:32 am #575025
    shah19888888
    Participant
    • Topics: 20
    • Replies: 10
    • ☆

    Thank you 🙂

    July 11, 2020 at 9:16 am #576548
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    You’re welcome!

  • Author
    Posts
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