dfs brainache today - non current asset chapter

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lisnic
lisnic Registered Posts: 141 Dedicated contributor 🦉
ok im having dfs brainache today i swear its all going in one ear and straight back out or not even going in one ear at all!

the chapter that is stumping me today is non current assets - not the whole chapter but some of it - its just so long and theory based i cant feel it sticking iyswim. i Was at investment property and realised i was wasting my time so am now doing something else

my course guide says medium priority - and says under exam context says most tasks are written

how important is this chapter if i dont get it and continue to not get it?

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  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    whats stumping you maybe someone or even me (i use lightly)
  • lisnic
    lisnic Registered Posts: 141 Dedicated contributor 🦉
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    its just all the theory not going in - i think seems a very long chapter with lots of theory to remember and take in and only small handful of practical
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    i think learn the definition understand what it means and why we have it then move on and dont forget current assets also to include at the end that it is 12 months or less
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    its like you use non current assets in the B/S and Consolidated B/S it is based on the accruls concept (depreciation)
  • lisnic
    lisnic Registered Posts: 141 Dedicated contributor 🦉
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    thanks avic im going to spend some time on this chapter again after dinner and try and finish it

    ive just had a quick look through my text (bpp course companion) and i think what it is is that it just seems to describe things theory wise and give a very brief example like a quick calculation but i cant really see from this where it all fits in iyswim - like for revaluations/intangible assets i need to see this applied on a bs for example as cant see in my head how it fits in iyswim and how to lay this out (unless i have totally missed this out!) so havent a clue on what im supposed to do with all this theory as havent seen it in practice ??

    unless this is then illustrated in following chapter who knows?
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    All you have to think about with an intanglbul asset is its something you cant touch for example

    When an accountant buys a list of clients from another accountant!

    It will bring economic value (like an asset) but unlike an asset say an machine it wont have depreciation as it is an asset without physical substance

    Like my book says "well its an asset you cant kick isnt it" (well you could but above exapmle you dont want to be kicked back :lol:)
  • lisnic
    lisnic Registered Posts: 141 Dedicated contributor 🦉
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    so do i just need to know about them or is there things from this chapter i need to apply when doing my financial statements etc that is what is getting me i just am not sure as its isnt clear at all in the text or the guide for the chapter. if its just a case of knowing the theory behind this chapter that is ok as ill just keep going through it until it starts to go in but if i do need to do something with this when compiling my statements im going to have to go to bpp and ask them for a better explanation of how and when iyswim
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
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    Hi,

    First of all I am not sure what you mean when you say "iyswim"???

    In terms of intangibles, you clearly need to know how to calculate goodwill because this is bound to come up in a consolidation. You also need to know what to do with any impairment of goodwill. Previous sittings have seen the examiner say "the directors consider the goodwill to be 25% impaired at the reporting date". This means you CR goodwill in the non-current assets section and DR consolidated retained earnings with the value of the calculated impairment.

    Goodwill is dealt with in IFRS 3 but in terms of other intangibles, these are covered in IAS 38. You absolutely need to know how IAS 38 differentiates between research and development expenditure (research = written off to the statement of comp income, development = capitalised if it meets the IAS 38 criteria). Previous sittings have asked the candidate to define when an intangible asset is recognised as such.

    If you are unsure what is examinable under the respective standards, the Unit 11 Guidance Notes will give you a breakdown of what you need to know.

    I would say intangibles (other than goodwill) would be a "prime" discussion style question - but don't hold me to that!

    Regards
    Steve
  • A-Vic
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    We covered reserch and development a lot this week in class on whether to capitalise or write off.

    But thanks Steve at last the last bit that stumped in with goodwill was impairement now i get it :)
  • lisnic
    lisnic Registered Posts: 141 Dedicated contributor 🦉
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    ok if you dont succeed try try again

    so i think i have got the tangible assets part of the non current assets chapter now can i just confirm (very summarised) that i have got it and what to do with each part please

    ias 16 ppe

    item first recognised as asset when meets both recognition criteria - recognised first at cost - this is first period it is in balance sheet

    then cost model or revaluation model applied to work out value of carrying amount in future periods

    revaluation gains on ppe unrealised so not in income statement so revaluation reserve set up and note to balance sheet analysing this. value used in balance sheet is revalued amount less accumulated depreciation or nbv if cost model

    (need to do some more practices on working out revaluation surplus and preparing notes to bs but that will just be a case of doing them now)

    gain or loss on disposal recognised in income statement except when revalued asset as would then be a transfer from revaluation reserve to retained earnings

    ias 40 investment property

    first recognised as above when meets both criteria, carried at cost in first period in balance sheet

    again for future periods fair value - due to investent properties not being depreciated they are best measured at fair value

    ivestment properties (all not just some) revalued at each balance sheet date no revaluation reserve. gains and losses recognised in income statement

    gains or losses on disposal recognised in income statement

    is this the gist of it??

    sounds easy wrote like that now

    now onto intangible and impairment see if that will click
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