Accounts and Finance Topics

                                                                      Example # 1 The following information has been extracted from the financial statements of Trango Limited for the year ended 31 December 2015. Statement of comprehensive income for the year ended 31 December 2015                                Rs. Sales                                                                     ...

IAS-16 (P roperty, Plant, and Equipment) For each class of property, plant, and equipment, disclose: ·          Basis for measuring carrying amount ·          Depreciation method(s) used ·          Useful lives or depreciation rates ·          Gross carrying amount and accumulated depreciation and impairment losses ·          Reconciliation of the carrying amount at the beginning and the end of the period, showing: §   Additions §   Disposals §   Acquisitions through business combinations §   Revaluation increases or decreases §   Impairment losses §   Reversals of impairment losses §   Depreciation §   Net foreign exchange differences on translation §   Other movements Additional disclosures The following d...

ROONEY   (a) Rooney has recently finished building a new item of plant for its own use. The item is a press for use in the manufacture of industrial diamonds. Rooney commenced construction of the asset on 1st April 2013 and completed it on 1st April 2015.     1st January 2013, Rooney took out a loan to finance the construction of the asset. Interest is charged on the loan at the rate of 5% per annum. The annual interest must be paid in four equal instalments at the end of each quarter. Rooney capitalises interest on manufactured assets in accordance with the rules in IAS 23 Borrowing costs.     The costs (excluding finance costs) of manufacturing the asset were Rs. 28 million.   Required: State the IAS 23 rules on the capitalisation of borrowing costs, calculate the cost of the asset on initial recognition and explain the amount of borrowing cost capitalised. (b) The press comprises two significant parts, the hydraulic system and the ‘fra...