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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 @ 4mIncrease in expenditure from 1 Feb 2015
1 Feb – 30 Apr 2015 – 1 qtr @ $5m
1 May – 31 Jul 2015 – 1 qtr @ 5mThank you
Hi,
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
It 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
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