- 15 Marks
CR – Nov 2016 – L3 – Q6 – Events After the Reporting Period (IAS 10)
Discuss IFRS 5 requirements for non-current assets held for sale and evaluate event impacts per IAS 10.
Question
Maranathan Plc acquired a property for N4 million with annual depreciation on a straight-line basis at 7.5%. An impairment loss of N350,000 was recognized as of May 31, 2013, with accumulated depreciation at N1 million. The property was classified as held for sale on October 1, 2013, with fair value less costs to sell of N2.4 million. In December 2013, interim financials reported an improved fair value less costs to sell of N2.52 million. By May 31, 2014, fair value increased to N2.95 million, and the property was eventually sold on June 5, 2014, for N3 million.
Required:
a. Assess these transactions per IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. (5 Marks)
b. Evaluate the impact of events on the property over time and on reported gain per IAS 10 Events After the Reporting Period. (10 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Depreciation, Disposal Gain, Held for Sale, Impairment Loss, Non-current Assets
- Level: Level 3