说明新完毕sbr讲义part a2non current assets

1、Non-current assetsProperty, plant and equipment (IAS 16)OverviewProperty, plant and equipmentDefinitionDepreciationRecognitionMeasurement at recognitionMeasurement after recognitionDefinitionTangible items that:a) are held by an entity for use in the production or supply of goods or services, for re

2、ntal to others, or for administrative purposes; andb) are expected to be used during more than one periodRecognitionProbable that future economic benefits will flow to the entityCost can be measured reliablyMeasurement at recognition+Finance costs Capitalised for qualifying assets (IAS 23)+Subsequen

3、t costs Capitalised when:- cost of replacing is incurred, and- recognition criteria mete.g. furnace reliningExchanges Cost = normally FV of asset given upPurchase price+Import dutiesNon-refundable purchase taxesDirectly attributable costsEmployee benefit costs Site preparationInitial delivery & hand

4、ling costs Installation & assembly costs Professional feesCosts of testingSite restoration provision (IAS 37),Measurement after recognitionCost mValuation:Cost less accumulated depreciation/impairment losses-Fair value (using fair value hierarchy in IFRS 13)Highest and best use valuation Sufficient

5、regularity that carrying amount does not differ materially from FV at end of reporting period volatile: annualnon-volatile: 3-5 years Revalue entire classRevaluation m-Revalued amount less subsequent accumulated depreciation/ impairment lossesUpward revaluation to OCI Downward revaluation:- 1st to O

6、CI- then in P/L-DepreciationAllocate depreciable amount (cost/revalued amount less residual value) over ULSeparate into depreciable partsLand normally has unlimited life not depreciatedAt least annual review of UL and depreciation methodInvestment property (IAS 40)DefinitionInvestment property (IAS

7、40)Investment property is property (land or building or part of a building or both) held to earn rentals or for capitalappreciation or both, rather than for:a)use in the production or supply of goods or services or for administrative purposes; orsale in the ordinary course of business.b)RecognitionI

8、nvestment property is recognised when it is probable that future economic benefits will flow to the entity and the cost can be measured reliably.Measurement at recognitionCost, including directly attributable expenditure and transaction costs.Measurement after recognitionFair value m:Any change in f

9、air value reported in profit or loss Not depreciatedCost m:As cost mof IAS 16.Youre a Champion!Thanks for staying with us. You have finished this task.IAS 16&40 PracticeQ51- Rose 06/11(e) Rose purchased plant for $20 million on 1 May 20X4 with an estimated useful life of six years. Its estimated res

10、idual value at that date was $1.4 million. At 1 May 20X7, the estimated residual value changed to $2.6 million. The change in the residual value has not been taken into account when preparing the financial statements as at 30 April 20X8.Q44-Traveler 12/11(v) Traveler acquired a new factory on 1 Dece

11、mber 20X0. The cost of the factory was $50 million and it has a residual value of $2 million. The factory has a flat roof, which needs replacing every five years. The cost of the roof was $5 million. The useful economic life of the factory is 25 years. No depreciation has been charged for the year.

12、Traveler wishes to account for the factory and roof as a single asset and depreciate the whole factory over its economic life. Traveler uses straight-line depreciation.Grange 12/09(iv) Grange acquired a plot of land on 1 December 20X8 in an area where the land is expected to rise significantly in va

13、lue if plans for regeneration go ahead in the area. The land is currently held at cost of $6 million in property, plant and equipment until Grange decides what should be done with the land. The market value of the land at 30 November 20X9 was $8 million but as at 15 December 20X9, this had reduced t

14、o $7 million as there was some uncertainty surrounding the viability of the regeneration plan.Intangible assets (IAS 38)OverviewDefinitionIntangible assetsAmortisation/impairment testsRecognitionIndefinite useful lifeFinite useful lifeMeasurement after recognitionMeasurement at recognitionCost mReva

15、luation mSeparate acquisitionAcquired in business combinationGovernment grantExchanges of assetsInternally generated goodwillInternally generated intangiblesDefinitionan identifiable asset without physical substanceRecognitionProbable future economic benefits Cost can be measured reliablyNOT CAPITAL

16、ISED:Internally generated:EXPENSED:Start-up costsBrands Publishing titles Customer listsOther similar itemsTraining Advertising/promotion Reorganisations/relocationsMeasurement at recognitionAcquired in business combinationCapitalised at FV at date ofacquisition (IFRS 3)Separate acquisitionGovernmen

17、t grantCapitalised at cost Include directly attributable costsAsset & grant at FV; or Nominal amount + expenditure directly attributable to preparation for useMeasurement at recognitionExchanges of assetsCost = normally FV of asset given upInternally generated goodwillNOT recognisedInternally genera

18、ted intangiblesDevelopment PhaseResearch PhaseCapitalise and amortise if following conditions are met:Recognise as expenseProbable future economic benefits Intention to complete and use/sellResources adequate to complete and use/sell Ability to use/sellTechnical feasibilityExpenditure can be measure

19、d reliablywhen incurredMeasurement after recognitionCost mCost less accumulated amortisation/impairment lossesRevaluation mTo FV only if active market (IFRS 13): transactions for the asset take place with sufficient frequency and volume to provide pricing information on an ongoing basisNo active mar

20、ket Revalue whole classcost mRevalue regularly such that BV not materially diff to FVAmortisation/impairment testsFinite useful lifeAmortise on systematic basis over useful life Begins when available for useResidual value normally assumed = 0Review useful life and method at least each financial year

21、-endIndefinite useful lifeNOT amortisedReview indefinite useful life assessment each period Impairment tests at least annuallyJocatt 12/10(iii) Jocatt purchased a research project from a third party including certain patents on 1 December 20X1 for $8 million and recognised it as an intangible asset.

22、 During the year, Jocatt incurred further costs, which included $2 million on completing the research phase, $4 million in developing the product for sale and $1 million for the initial marketing costs. There were no other additions to intangible assets in the period other than those on the acquisit

23、ion of Tigret.Minny 12/12(v) Minny purchased patents of $10 million to use in a project to develop new products on 1 December 20X1. Minny has completed the investigative phase of the project, incurring an additional cost of $7 million and has determined that the product can be developed profitably.

24、An effective and working prototype was created at a cost of $4 million and in order to put the product into a condition for sale, a further $3 million was spent. Finally, marketing costs of $2 million were incurred. All of the above costs are included in the intangible assets of Minny.Youre a Champi

25、on!Thanks for staying with us. You have finished this task.Impairment of assets (IAS 36)ScopeIAS 36 applies to impairment of all assets other than:inventories deferred tax assetsemployee benefit assets financial assetsinvestment property held under the fair value mbiological assets held at fair valu

26、e less costs to sell non-current assets held for sale.IssueAssets must be carried at no more than their recoverable amount.Recoverable Amount = Higher ofFair value less costs of disposalValue In UseLecture exampleAn entity has a single manufacturing plant which has a carrying amount of$749,000. A ne

27、w government elected in the country passes legislation significantly restricting exports of the product produced by the plant. As a result, and for the foreseeable future, the entitys production will be cutby 40%. Cash flow forecasts have been prepared derived from the most recent financial budgets/

28、forecasts for the next five years approved by management (excluding the effects of general price inflation):Year1$000 2302$000 2113$000 1574$000 1045$000 233(including disposal proceedsFuture cash flowsLecture exampleIf the plant was sold now it would realise $550,000, net of selling costs.The entit

29、y estimates the pre-tax discount rate specific to the plant to be 15%, excluding the effects of general price inflation.RequiredCalculate the recoverable amount of the plant and any impairment loss.Note. PV factors at 15% are as follows.Year12345PV factor 15%0.869570.756140.657520.571750.49718Lectur

30、e example - AnswerThe fair value less costs of disposal of the plant is below its carrying amount so it may be impaired. It is now necessary to find the value in use in order to determine whether an impairment has occurred and to quantify any impairment loss.YearFuture cash flowsPV factor at 15%Disc

31、ounted future cash flows$000 20016010359116638$000 230211157104233123450.869570.756140.657520.571750.49718To calculate the impairment loss, compare the carrying amount of $749,000 with the higher of value in use ($638,000) and fair value less costs of disposal ($550,000). The impairment loss is ther

32、efore $749,000 $638,000 = $111,000.Impairment indicatorsThe entity should look for evidence of impairment at the end of each period and conduct an impairment review on any asset where there is evidence of impairment.The following are indicators of impairment:Impairment indicatorsAnnual impairment te

33、sts, irrespective of whether there are indications of impairment, are required for:intangible assets with an indefinite useful life/ not yet available for usegoodwill acquired in a business combination.Cash-generating unitsWhere it is not possible to estimate the recoverable amount of an individual

34、asset, the entity estimates the recoverable amount of the cash-generating unit to which it belongs.DefinitionCash-generating unit (IAS 36)A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets

35、 or groups of assets.Allocation of impairment losses with a CGU(a) General ruleThe impairment loss is allocated in the following order:(1) Goodwill allocated to the CGU(2) Other assets on a pro-rata basis based on carrying amountThe carrying amount of an asset cannot be reduced below the higher of i

36、ts recoverable amount (if determinable) and zero.The amount of the impairment loss that would otherwise have been allocated to the asset is allocated to the other assets on a pro-rata basis.Allocation of impairment losses with a CGU(b) Allocation of loss with unallocated corporate assets or goodwill

37、Where not all assets or goodwill will have been allocated to an individual CGU then different levels of impairment tests are performed to ensure the unallocated assets are tested:Test of individual CGUsI.Test the individual CGUs (including allocated goodwill and any portion of the carrying amount of

38、 corporate assets that can be allocated on a reasonable and consistent basis).Test of group of CGUsII.Test the smallest group of CGUs that includes the CGU under review and to which the goodwill can be allocated/ a portion of the carrying amount of corporate assets can be allocated on a reasonable a

39、nd consistent basis.Lecture exampleThe Santander Group is made up of 2 cash-generating units (as a result of a combination of various past 100% acquisitions), plus a head office, which was not allocated to any given cashgenerating unit as it supports both divisions.Due to falling sales as a result o

40、f an economic crisis, an impairment test was conducted at the year end. The consolidated statement of financial position showed the following net assets at that date.Division ADivision BHead office$m 90- 20110Unallocated goodwill$m- 10- 10Total$m 780601801,020$m 62030110760$m 1,4901003101,900Propert

41、y, plant & equipment (PPE) GoodwillNet current assetsLecture exampleThe recoverable amounts (including net current assets) at the year end were as follows:$mDivision A Division B Group as a whole1,0007201,825The recoverable amounts of the two divisions were based on value in use. The fair value less

42、 costs of disposal of any individual item was substantially below this.No impairment losses had previously been necessary.RequiredDiscuss, with suitable computations showing the allocation of any impairment losses, the accounting treatment of the impairment test.Lecture example - AnswerWhere there a

43、re multiple cash-generating units, IAS 36 Impairment of Assets requires two levels of tests to be performed to ensure that all impairment losses are identified and fairly allocated.First Divisions A and B are tested individually for impairment. In this instance, both are impaired and the impairment

44、losses are allocated first to any goodwill allocated to that unit and secondly to other non-current assets (within the scope of IAS 36) on a pro-rata basis.This results in an impairment of the goodwill of both divisions and an impairment of the property, plant and equipment in Division B only.Lectur

45、e example - AnswerA secondthen performed over the whole businessincluding unallocated goodwill and unallocated corporate assets (the Head office) to identify if those items which are not a cash-generating unit in their own right (and therefore cannot be tested individually) have been impaired.The ad

46、ditional impairment loss of (W2) $15m is allocated first against the unallocated goodwill of $10m, eliminating it and then to the unallocated head office assets reducing them to$85m. Divisions A and B have already been tested for impairment so no further impairment loss is allocated to them or their

47、 goodwill as that would result in reporting them at below their recoverable amount.Lecture example - AnswerCarrying amounts after impairment test:Division ADivision BHead Office$m 85- 20105Unallocated goodwill$m- 0- 0Total$m 780401801,000$m 6100110720$m 1,475403101,825PPE 780/(620 10)/(90 5)Goodwill

48、 (60 20)/(30 30)/(10 10)Net current assetsLecture example - AnswerWorkings1Test of individual CGUs:Division A Division B$m 1,020(1,000)20$m 760(720)40Carrying amount Recoverable amount Impairment loss Allocated to:GoodwillOther assets in the scope of IAS20362030- 1040Lecture example - AnswerWorkings

49、2Test of group of CGUs:$m 1,840(1,825)15Revised carrying amount (1,000 + 720 + 110 + 10) Recoverable amountImpairment loss Allocated to:Unallocated goodwill Other unallocated assets10515Youre a Champion!Thanks for staying with us. You have finished this task.After the impairment reviewThe depreciati

50、on/ amortisation is adjusted in future periods to allocate the assets revised carrying amount less its residual value on a systematic basis over its remaining useful life.GoodwillOnce recognised, impairment losses on goodwill are not reversed.Reversal of past impairmentsA reversal for a CGU is alloc

51、ated to the assets of the CGU, except for goodwill, pro rata with the carrying amounts of those assets.However, the carrying amount of an asset is not increased above the lower of:a)b)its recoverable amount (if determinable); andits depreciated carrying amount had no impairment loss originally been

52、recognised.Any amounts left unallocated are allocated to the other assets (except goodwill) pro-rata.Reversal of past impairmentsThe reversal is recognised in profit or loss, except where reversing a loss recognised on assets carried at revalued amounts, which are treated in accordance with the appl

53、icable IFRS.For example, an impairment loss reversal on property, plant and equipment reverses the loss recorded in profit or loss and any remainder is credited to other comprehensive income (IAS 16).Q40- Trailer06/13(e) On 1 June 20X1, Trailer acquired office accommodation at a cost of $90 million

54、with a 30-year estimated useful life. During the year, the property market in the area slumped and the fair value of the accommodation fell to $75 million at 31 May 20X2 and this was reflected in the financial statements. However, the market recovered unexpectedly quickly due to the announcement of major government inv