mmmmmmmmm
FRK 122
gemmausmanewg
, Chapter 1 Non-Current Assets
Depreciation
I
Current Non-current
• inventory
• cash and cash equivalents
•
•
land and buildings
vehicles
cumulatede on
• debtors
• furniture/machinery/equipment
• other income receivables/prepaid expenses
Depreciable amount= Cost - Residual Value
}
Carrying Amount= Cost - Accumulated Depreciation
Residual Value: the estimated amount that the asset will be worth at the end of its useful life
Useful Life: the estimated period of time that the asset will be used by three entity or the determined/estimated when asset is ready for use
number of production units expected from the use of three asset
Depreciation Methods
Straight Line Diminishing Balance Production Unit
•
We or cost or fixed installment •
* carrying value/book value method
costresidualvalue
actuaunita
cost residual value)x:x no
months produced
accumulated
a
no
on
or cost
cost residual value
no. months
x
useful life 12
Asset Realization or asset disposal or scrapping of asset
Cancel CP of sold asset 5 Close off asset realization to profit/loss
dr asset realization dr asset realization
Profit
.
A
logprofitonasset
cr vehicles equipment .
realization a
dr .
2 Record ‘extra’ depreciation for the current year b Loss
.
cr . asset realization
dr depreciation
6 Do the rest of depreciation for other assets
or accumulated depreciation
dr depreciation
3 Cancel TOTAL accumulated depreciation up to date of disposal
.
cr ·
accumulated depreciation
dr accumulated depreciation
Closing Transfers
or asset realization
dr Profit realization dr Profit loss
Profit/Loss= SP-CV
asset
Do ‘disposal transaction’ Profit &
. on .
or
A .
Profit or loss
cr
depreciation
.
cr .
asset dr Profit or loss
b Loss
.
dr bank depreciation
sold for cash
cr
cr realization
A
.
.
.
.
loss asset realization
.
cr . on
b . sold on credit
dr debtors crasnation
C .
taken by owner
dr .
drawings creasenization
d donated .
dr donations creasenization
becomes profit
C .
stolen dr lossdue assenization pays
if insurance
out
f traded in .
1. record new asset
drehicle creditor · trade in value
carrying amount= profit loss
. asset realization
2 creditors assenation
dr.
, Intangible Non-Current Assets
• Patents • Fishing Quotas o mortisation Amortisation is an expense
• Copyrights • Customer Lists cumulated
co
-
• Trade Marks • Prototypes -
mortisation on ...
• Franchises • Computer Software
m un
Depreciation for intangible assets is called AMORTISATION Straight Line Diminishing Balance
expense
Impairment of Assets
expense
Impairment Loss: a decrease in the value of a non+current asset (tangible or intangible)
Carrying amount for intangible non-current asset= cost - accumulated amortisation do mpairment losses
Carrying amount for tangible non-current asset= cost - accumulated depreciation or
-
cumulated
impairement losses on. . .
Property, Plant and Equipment Note 2
Other Intangible Assets 2
I III Il
Carrying Amount @ beg Carrying Amount @ beg
Cost Cost
Accumulated Depreciation Accumulated Amortisation
Movements during the year Movements during the year
Acquisitions Acquisitions
Disposals at carrying value Disposals at carrying value
Depreciation Amortisation
Impairment losses Impairment losses
Carrying Amount @ end Carrying Amount @ end
Cost Cost
Accumulated Depreciation Accumulated Amortisation
Accumulated Impairment losses
Accumulated Impairment losses
Carrying amount @ end= carrying amount @ beg + acquisitions - carrying amount of disposal - depreciation/amortization - impairment losses
Accumulated depreciation/amortization @ end = accumulated depr/amortization @ beg - accumulated depr/amortisation of disposal + depr/amortization for year
Cost @ end= cost @ beg + acquisitions - cost of disposal
-
set Realization ccunuated depr amort on
bd
..
Jepp -
mort
Accumulated -
set realization Balance Acc depr Amort...
Vehicle Acc depr Amort. ..
Der mortfa
-
Bank/CC/DC/Donations etc
Profit on asset realization orLoss on asset realization
FRK 122
gemmausmanewg
, Chapter 1 Non-Current Assets
Depreciation
I
Current Non-current
• inventory
• cash and cash equivalents
•
•
land and buildings
vehicles
cumulatede on
• debtors
• furniture/machinery/equipment
• other income receivables/prepaid expenses
Depreciable amount= Cost - Residual Value
}
Carrying Amount= Cost - Accumulated Depreciation
Residual Value: the estimated amount that the asset will be worth at the end of its useful life
Useful Life: the estimated period of time that the asset will be used by three entity or the determined/estimated when asset is ready for use
number of production units expected from the use of three asset
Depreciation Methods
Straight Line Diminishing Balance Production Unit
•
We or cost or fixed installment •
* carrying value/book value method
costresidualvalue
actuaunita
cost residual value)x:x no
months produced
accumulated
a
no
on
or cost
cost residual value
no. months
x
useful life 12
Asset Realization or asset disposal or scrapping of asset
Cancel CP of sold asset 5 Close off asset realization to profit/loss
dr asset realization dr asset realization
Profit
.
A
logprofitonasset
cr vehicles equipment .
realization a
dr .
2 Record ‘extra’ depreciation for the current year b Loss
.
cr . asset realization
dr depreciation
6 Do the rest of depreciation for other assets
or accumulated depreciation
dr depreciation
3 Cancel TOTAL accumulated depreciation up to date of disposal
.
cr ·
accumulated depreciation
dr accumulated depreciation
Closing Transfers
or asset realization
dr Profit realization dr Profit loss
Profit/Loss= SP-CV
asset
Do ‘disposal transaction’ Profit &
. on .
or
A .
Profit or loss
cr
depreciation
.
cr .
asset dr Profit or loss
b Loss
.
dr bank depreciation
sold for cash
cr
cr realization
A
.
.
.
.
loss asset realization
.
cr . on
b . sold on credit
dr debtors crasnation
C .
taken by owner
dr .
drawings creasenization
d donated .
dr donations creasenization
becomes profit
C .
stolen dr lossdue assenization pays
if insurance
out
f traded in .
1. record new asset
drehicle creditor · trade in value
carrying amount= profit loss
. asset realization
2 creditors assenation
dr.
, Intangible Non-Current Assets
• Patents • Fishing Quotas o mortisation Amortisation is an expense
• Copyrights • Customer Lists cumulated
co
-
• Trade Marks • Prototypes -
mortisation on ...
• Franchises • Computer Software
m un
Depreciation for intangible assets is called AMORTISATION Straight Line Diminishing Balance
expense
Impairment of Assets
expense
Impairment Loss: a decrease in the value of a non+current asset (tangible or intangible)
Carrying amount for intangible non-current asset= cost - accumulated amortisation do mpairment losses
Carrying amount for tangible non-current asset= cost - accumulated depreciation or
-
cumulated
impairement losses on. . .
Property, Plant and Equipment Note 2
Other Intangible Assets 2
I III Il
Carrying Amount @ beg Carrying Amount @ beg
Cost Cost
Accumulated Depreciation Accumulated Amortisation
Movements during the year Movements during the year
Acquisitions Acquisitions
Disposals at carrying value Disposals at carrying value
Depreciation Amortisation
Impairment losses Impairment losses
Carrying Amount @ end Carrying Amount @ end
Cost Cost
Accumulated Depreciation Accumulated Amortisation
Accumulated Impairment losses
Accumulated Impairment losses
Carrying amount @ end= carrying amount @ beg + acquisitions - carrying amount of disposal - depreciation/amortization - impairment losses
Accumulated depreciation/amortization @ end = accumulated depr/amortization @ beg - accumulated depr/amortisation of disposal + depr/amortization for year
Cost @ end= cost @ beg + acquisitions - cost of disposal
-
set Realization ccunuated depr amort on
bd
..
Jepp -
mort
Accumulated -
set realization Balance Acc depr Amort...
Vehicle Acc depr Amort. ..
Der mortfa
-
Bank/CC/DC/Donations etc
Profit on asset realization orLoss on asset realization
