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Depreciation:Dismantling cost should be discounted to present value. Then we have to depreciate on the total

amount.Revaluation of an asset: It is companys policy to revalue the asset in time to time. There is no

rule to revalue your asset at certain period but remember that when you revalue your one asset

then you have to revalue all the assets which is similar with that asset.Accounting treatment:Extra cost+ acc. Depdr Revaluation reserve cr

Normally, revaluation reserve will be shown in the sfp( socie)If it is a gain then charge that gain in the I/S in comprehensive income section. But if it is a loss

then charge it normally in the I/S ( Impairment of asset).But if it is a loss but previously it was a gain at that situation you have to offset the figure.

Any revaluation surplus standing to the cr of a disposal asset should be transferred to retainedearnings.

IAS 36 - IMPAIRMENT OF ASSETSImpairment of asset Calculation: NBVvs Recoverable amount (Higher of the two values :NSP

and VIU)Calculation of caring value of asset- format

Item- asset - 1st

impairment revised- asset - second impairment- Revised assetHow to utilize the Impairment figure:

1. to reduce any specific asset that has lost value2. to reduce the carrying amount of any goodwill allocated to the CGU, and

3. then, to the other assets of the unit pro rata on the basis of the carrying amount ofeach asset in the unit.

Finance Cost:

Put simply, to encourage an investor to invest in your Financial Instrument you could offernot just interest but also a discount on first issue and maybe a premium on redemption.

When one compares the net proceeds with the total payments, the difference is known as financecost.

finance costs

Five column solution for Finance costOpening balance - finance cost(% of ob per yr) - Interest paid as % on loan notes- closing bal

Finance cost= total payment (plus redemption value) proceed from loan (deduct discount andcost of borrowing). Int rate will be counted on par value of loan note .always!!

Opening bal= proceed from loan (deduct discount and cost of borrowing)I/S charge= finance cost per yr

B/S charge= cl=difference between the finance cost and interest paidNcl= total liability less cl

Finance charge (convertible loan)

Interest payment per yr ** redeemtion payment full **Then discounting these figures into present value at the higher discounting rate

Then present value(debt)-equity value(bal figure) = par value of loan(convt)Then debt and equity figure will go to the b/s .

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The movement of liability will be same as you did before.Je: bank dr ** debt and equity cr **

TAXProvision should be made for this yr tax which will be paid at the next yr. If the tax paid amount

is less than the provision then overprovision will ariseand vice versa.

Over provision is like a income.Format of doing calculation of the TaxCorporation tax of the yr + under/(over provision) + deferred Tax

Deferred Tax Calculation

Opening balance at the star of the yr- I/S transfer of the yr = closing balance of the yr

Deferred tax: there is difference between the original profit of the yr based on GAAP and theprofit based on fiscal rules. This differences can be categorized in two part. They are

Permanent Difference(no deferred tax) Temporary Difference (Deferred Tax allowed)Patent, royalty fee and accelerated capital allowance.

Deferred tax is c.tax on Tem difference.

NBV-WDV=subtotal * 25% tax= Deferred Tax

C+U+D= total charge will go to the I/S. But only C goes to the cl portion of sfp and deferredtax closing balance will go to ncl portion of sfp.

Construction Contracts

The main idea of this chapter is to spread the revenue and profit of a big contract which last forseveral years according to percentage of completion. By calculating two figures revenue and

profit by percentage then find out the other figure, cost of sale by balancing.

Cost of sales figure of the yr will go to I/S and the gross amount due from customer will go toB/S in the ca portion.Formula of calculating amount due from customer=total cost to date+ profit

to date- bill in progress.

Finance lease: (in arrear)

Yr> op bal + Inte = Sub total Installment = closing bal

Closing bal is the total liability. Spilit in to CL= next yr installment-interest. Balancing figurewill go to the NCL

Finance Lease: (IN Advance)

Yr> op bal installment = sub total + interest = closing bal

Closing bal = total liability. Split in to CL = next yrinstallment(accuredint and capital element of

next yr) . And balancing fig will go to NCL

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EPSEPS * P/E ratio = market price of the share

EPS Calculation

Full price EPS= Earnings/ No of ordinary shares

Time is important in here. Shares are in issued for how many months.

Bonus Issue

EPS = Earnings/ total ordinary share+ Bonus IssueTo compare the EPS of this yr to previous yr only the earnings from the previous yr will be

used. Rest of the things will be same.

Right IssueEPS= 1.Find out the EX(4 share market price+1 share previous price)/ 5.2. Then calculate the

fraction CUM/EX.3. EPS =Earnings/(ords*fraction*months pre)+(all ords*post months)

Diluted EPS( convertible bond)=(Earnings+ interest net of tax)/ords+extra converted share

Share options=1. Market price- option price and Find out the % of reduction in price 2. Use that% on no of options share. 3. Ords+ option share= (total share) so..earnings/total share.