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Hi Mr MikeLittle
I have a question about intangible assetsAdvent is a publicly listed company. Details of Advent’s non-current assets at 1 October 20X8 were:
1)Land and building
2)Plant
3)Telecommunications
Total
$m $m $m $m
Cost/valuation 280 150 300 respectively
Accumulated depreciation/amortisation (40) (105) (30)
Carrying amount 240 45 270Plant is depreciated at 20% per annum on cost with time apportionment where appropriate. On 1 April 20X9
new plant costing $45 million was acquired. In addition, this plant cost $5 million to install and commission.
No plant is more than four years oldwhat is the depreciation charge on the plant for the year ended 30 Sep 2009?
why it is calculated like that:
existing plant 150×20%=30
new plant 50×10%=5
Total 35But in my opinion, it should be calculated like that
Carrying Amount 45 (1 october 2008)
depreciation (from 1 october to 1 aprel 6 monthly) 15
Carrying amount (to the date 1 April 2009) 30
revalued 15
Installation 5
Total =50 and we have only 1 year useful life how we depreciate?Where have you found this figure for “revalued 15” – I can’t see any mention of a revaluation in your post
The 150 cost of plant brought forward is the basis for 20% depreciation ON COST (says the question) not on carrying value
So depreciation on the 150 is 20% * 150 = 30
Depreciation on the new plant 50 (45 cost + 5 installation costs) for 6 months is 50 * 20% * 6/12 = 5
So depreciation on plant for the year ended 30 September 2009 is 35
OK?
Why is the title of this thread “IAS 38 Intangible Assets”?
why you calculate whole year of depreciation 150×20%
because year begins 1 October and ended 30 sep
and we first calculate 6 monthly 150*20%*6/12=15 and plus
after the 1 aprel 50*20%*6/12=5 and total 20Does it matter how you arrive at 35?
I often find it easier to isolate the new asset (or the old one that is sold half way through the year, where appropriate) and treat those unusual ones separately
That leaves the ones that were ours at the start of the year and that are still ours at the end of the year – and they have a full year’s depreciation calculated on them
That then leaves the new ones (as in your post) and the old ones disposed of part way through the year and, in both those cases, time apportionment will apply
OK?
all of the things you have mentioned I understood. But only the things that I cant understand that why we dont calculate 6 monthly depreciation for the assets from the date 1 Oct 2008 to 1 Apr 2009 . others are clear
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