This topic contains 4 replies, has 3 voices, and was last updated by 
Ken Garrett 5 months ago.
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- September 2, 2017 at 9:43 pm
Question. ((Do we capitalise the cost of long leasehold property))
If no, then how we can charge depreciation of restaurant that hold a 25 year lease.? This is an example mention in F3 but I studied in FA1 that rent of long leasehold property is revenue expenditure then how it’s capitalised here???
ThanksSeptember 3, 2017 at 5:24 pmThere can ve two elements to a lease:
1 An up-front capital payment to acquire the lease. This is capitalised and amortised/depreciated over the life of the lease.
2 Sometimes there is also a (usually) small ground rent to pay each year. This is an annual expense.
January 11, 2019 at 2:26 pmThe net book value of a company’s non-current assets was $200,000 at 1 August 20X2.During the year ended 31 July 20X3,the company sold fixed assets for $25,000 onwhich it made a loss of$5,000.
The depreciation charge for the year was $20,000.What was the net book value of fixed assets at 31July 20X3?
Can you answer this please.January 13, 2019 at 6:17 pmProceeds from sale = 25,000 and a loss of 5,000 was made, so the NBV of the assets sold must have been 30,000
So, the closing NBV must be: 200,000 – 30,000 – 20,000 (charge for the year) = 150,000.
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