DFS- A Summary of IFRS and IAS

peabo

For Steve

On IAS 7 example (illustration ).
How do you get to the NBV of property ,plants and equipment of 692 (W2).
Im doing distance and self-studying and its not easy.

Steve Collings

Hi Peabo,

In order to arrive at the $692 net book value we have to rearrange the figures in the workings. If you look at W2 and work backwards we have sold an item of PPE for $509. This resulted in a loss on disposal (which has been added back to profit from ops) of $183 which means that the net book value was $692 (i.e. $509 proceeds + $183 loss = $692). If we had made a $100 profit on disposal this would have meant that the net book value of the asset sold would have been $409 (i.e. $509 proceeds received for an asset with a NBV of $409).

Information such as the net book value of the assets disposed of would be given to you in a question in your exam. However, as my manual is not designed to be a text book or revision kit, merely a summary of the IFRS and how they work illustrated by numbers where applicable, I did not include such information in the illustrations.

I hope that helps. Feel free to post any further questions.

Best wishes
Steve