Hi Sir
Can you kindly indicate why the quarters was broken down to 1/3 (.3333) and 2/3 (.6666) and not left as full quarters?
This is what I did to understand the quarters, I really do not understand the 1/3 and 2/3 and why it was done.
1 Aug 2014 - 31 Oct 2014 - 1 qtr @ $4m
1 Dec 2014 - 31 Jan 2015 - 1 qtr @ $4m
Therefore 2 qtrs @ 4m
Increase in expenditure from 1 Feb 2015
1 Feb - 30 Apr 2015 - 1 qtr @ $5m
1 May - 31 Jul 2015 - 1 qtr @ 5m
Thank you
Ask the Tutor ACCA FR
Intangibles - Practice Question Vane Plc # 2
3y ago#1Hi,
Sorry, I'm not quite sure what you're referring to in your question. Where is the question from?
If you let me know then I can help you with your query.
Thanks
The question came from question in the practice questions in FR Quiz
Actually Vein Plc
3y ago#3It is because of when the intangible meets the criteria for capitalisation on 31 May, which does not coincide with the end of a quarter.
February, March and April make up one quarter and so the $4m.
Capitalisation starts at the end of May, so there will be one month (May) of the following quarter to expense prior to capitalisation starting, hence the 0.333 (1/3). This plus the previous quarter gives the 1.333
There will then be two months of the quarter that will be capitalised and hence the 0.666 (2/3).
Hope that clears it up for you.
Thanks
ok thank you very much
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