Prepaid x + Prepaid expense (SOFP)
Accrued x accrued expense – accrued expense = 0
(SOFP)
Reversing old prepayment and creating new accrual
X expense TB expense + accrual + prepaid (IS)
Accrued x + Accrued expense (SOFP)
Prepaid x Prepaid x – prepaid x (SOFP)
Reversing old prepayment – ratio!
DR x expense
CR prepaid x
X expenses TB expense - prepaid x (IS)
Prepaid x Prepaid x – prepaid x (SOFP)
Reversing old accrual – ratio!
DR accrued x
CR x expense
x expenses TB Expense – accrued expense (IS)
Accrued x accrued expense – accrued expense = 0
(SOFP)
Creating new prepayment – ratio!
DR prepaid x
CR x expense
x expenses TB expense + prepaid expense (IS)
Prepaid x + Prepaid expense (SOFP)
Creating new accrual – ratio!
DR x expense
CR accrued x
x expenses TB expense + accrued expense (IS)
Accrued x + Accrued expense (SOFP)
Depreciation and disposal of PPE
if also disposal -> depreciation and disposal together
Disposal
check which part is already accounted for and which not
if sales proceeds have already been credited do not touch cash!
(x) Depreciation x £000
, END OF YEAR
Depreciation methods:
Straight line
Take Annual Depreciation charge = ‘at cost’ x percentage
= [(Initial Cost – Residual Value)/ Useful economic life] from ‘at cost’ value
Reducing Balance
Depreciation rate of NBV of previous year (cost – accumulated depreciation)
Based on months
Percentage x cost (NBV when red.) x 1/12 x number of months dep.
aufpassen wann Jahr aufhört – nicht umb. Dezember
Depreciation expense of x Calculate as above (IS)
Acc. depreciation x Previous depreciation (=Cost-NBV) +
Depreciation expense (SOFP)
(x) Disposal of (PPE) £000
watch out WHEN the year ends when
doing with months (not necessarily Dec)
Cost of disposed (PPE) (In text)
Acc. depreciation of disposed Depreciation expense x years
NBV of disposed
Disposal proceeds
Gain/ Loss on disposal NBV of disposed – Disposal proceeds (IS)
if difference is positive loss
(PPE) cost (remaining) Cost (TB) – cost of disposed (SOFP)
Depreciation expense of (PPE) This year’s dep. of (PPE) cost (remaining)
(IS)
(if months + depr. of disposed for months
within this year)
Acc. depreciation (PPE) Acc. Depreciation old – Acc. Depr. Disposed
Asset + Depreciation expense (SOFP)
Cash Cash before + disposal proceeds (SOFP)
(if sales proceeds have not been credited or
not accounted for)
Revaluation
Accrued x accrued expense – accrued expense = 0
(SOFP)
Reversing old prepayment and creating new accrual
X expense TB expense + accrual + prepaid (IS)
Accrued x + Accrued expense (SOFP)
Prepaid x Prepaid x – prepaid x (SOFP)
Reversing old prepayment – ratio!
DR x expense
CR prepaid x
X expenses TB expense - prepaid x (IS)
Prepaid x Prepaid x – prepaid x (SOFP)
Reversing old accrual – ratio!
DR accrued x
CR x expense
x expenses TB Expense – accrued expense (IS)
Accrued x accrued expense – accrued expense = 0
(SOFP)
Creating new prepayment – ratio!
DR prepaid x
CR x expense
x expenses TB expense + prepaid expense (IS)
Prepaid x + Prepaid expense (SOFP)
Creating new accrual – ratio!
DR x expense
CR accrued x
x expenses TB expense + accrued expense (IS)
Accrued x + Accrued expense (SOFP)
Depreciation and disposal of PPE
if also disposal -> depreciation and disposal together
Disposal
check which part is already accounted for and which not
if sales proceeds have already been credited do not touch cash!
(x) Depreciation x £000
, END OF YEAR
Depreciation methods:
Straight line
Take Annual Depreciation charge = ‘at cost’ x percentage
= [(Initial Cost – Residual Value)/ Useful economic life] from ‘at cost’ value
Reducing Balance
Depreciation rate of NBV of previous year (cost – accumulated depreciation)
Based on months
Percentage x cost (NBV when red.) x 1/12 x number of months dep.
aufpassen wann Jahr aufhört – nicht umb. Dezember
Depreciation expense of x Calculate as above (IS)
Acc. depreciation x Previous depreciation (=Cost-NBV) +
Depreciation expense (SOFP)
(x) Disposal of (PPE) £000
watch out WHEN the year ends when
doing with months (not necessarily Dec)
Cost of disposed (PPE) (In text)
Acc. depreciation of disposed Depreciation expense x years
NBV of disposed
Disposal proceeds
Gain/ Loss on disposal NBV of disposed – Disposal proceeds (IS)
if difference is positive loss
(PPE) cost (remaining) Cost (TB) – cost of disposed (SOFP)
Depreciation expense of (PPE) This year’s dep. of (PPE) cost (remaining)
(IS)
(if months + depr. of disposed for months
within this year)
Acc. depreciation (PPE) Acc. Depreciation old – Acc. Depr. Disposed
Asset + Depreciation expense (SOFP)
Cash Cash before + disposal proceeds (SOFP)
(if sales proceeds have not been credited or
not accounted for)
Revaluation
