Mini exercises q5 non current assets p201

The note starts with "the 15 year leasehold property was acquired on 1 April 2008 at cost of $30 million" That tells you that it has a 30 year life. If it was bought on 1 April 2008 and its carrying value in $25.2 million 1 year later, surely that means that depreciation for the year ended 31 March 2009 is reflected in the carrying value as also is the $2.8 million impairment. And that's why there's no figure for accumulated depreciation for the leasehold property shown in the trial balance The $300 is a net figure. Depreciation for the year to 31 March 2010 is $25.2 / 14 years = $1.8 million that brings carrying value down to $23.4 million but the values tells us that it's worth $24.9 million so we can / must credit the p or l with the difference of $1.5 Depreciation $1.8 million and reversed impairment of $1.5 million gives you the net figure of $300,000 All clear?

Thanks Mike, yes Would another way of writing it be: Dr dep expense (soci) 1800 Cr asset (accum dep) 1800 Dr asset 1500 Cr impairment (soci) 1500 Or is it more correct to net them?

In practice? They would be lumped together with all other administrative expenses and shown as a single figure with a breakdown in the notes. In particular, the TNCA note would identify depreciation, impairments, impairment reversals, disposals, additions, revaluations all on separate lines In an exam, show 300 ( but then, in brackets, show 1,800 - 1,500) Ok?

Yes that's great thanks a lot

You're welcome