Scheduling non current assets layout

Question 1

What is the general structure to schedule non current assets

Answer 1

Cost Section
Depreciation Section
NBV at start of the year
NBV at the end of the year

Question 2

What is within the cost section

Answer 2

As at start of the year
Additions at cost
Disposals at cost
Revaluation
As at end of the year

Question 3

What is within the depreciation section

Answer 3

As at the start of the year
Eliminated on disposal
Eliminated on revaluation
Charge for the year
As at the end of the year

Question 4

What are the 2 ways to work out depreciation

Answer 4

Straight line depreciation formula
= Cost - Recidual Balance / Expected years of use
= *If given the percentage (e.g 20%) just do Cost of asset x 0.2

Reducing balance depreciation formula
= Percentage x NBV

Question 5

Formula to calculate reducing balance depreciation

Answer 5

Percentage of depreciation x NBV

Question 6

Formula to calculate straight line depreciation

(Hint there are two types of SL Dep)

Answer 6

1. Straight line depreciation formula =(Cost - Residual value) / Expected years of usage
2. Reducing balance depreciation formula = % stated of depreciation x cost of asset

Question 7

What are revaluation reserves

Answer 7

It is a capital reserve in the equity section in the SOFP
It records increases of the value of NCAs

Question 8

To work out charge for the year

Answer 8

Percentage of depreciation stated x Cost Section Balance b/d

E.g Depreciation of machinery = 0.2 per annum
Cost Section b/d = £41000
0.2 x £41000 = £8200

See phone -> school -> Powers LTD for reference*

Question 9

To work out eliminated on revaluation of an asset

Answer 9

E.g Dep of furniture = 0.15 RB method
Cost of furniture = £3000
Furniture y/e 30 June 2017 = £1566

NBV b/d - NBV of disposals + Cost of Additions
£3000 - £1566 + £2500 = £3934

0.15 x £3934 = 590

See phone -> school -> Powers LTD for reference*

Question 10

To work out NBV at start

Answer 10

Balance b/d of the cost section - Balance b/d of the depreciation section

Question 11

To work out NBV at end

Answer 11

Balance c/d of the cost section - Balance c/d of the depreciation section

Question 12

To work out an asset eliminated on disposal

Answer 12

See Phone -> School -> Powers LTD workings