Reference no: EM132766160
Question - Case study - PAS 37 Provisions, Contingent Liabilities and Contingent Assets sets out the accounting treatment and disclosures for these transactions and events. The standard discusses general principles of recognition, measurement, and presentation as well as specific application guidance for certain issues. This guidance aims to assist preparers of financial statements in applying PAS 37.
The following situation has arisen during the preparation of the draft financial statements of Haywood Company for fiscal year ended July 31, 20X7:
On August 1, 20X6, Haywood Plc acquired a nuclear power plant at a cost of P200 million. Part of the arrangement was that the plant be dismantled and the site restored after its useful economic life of 20 years had passed. The cost of restoration was estimated on August 1, 20X6, after discounting to present value, to be P40 million. This amount reflected an appropriate discount rate of 6%, (75% of this estimate related to the dismantling of the plant, and 25% to the removal of waste fuel). At July 31, 20X7, due to regulatory and other obstacles, no power had yet been produced, hence no waste fuel had been generated.
Requirements -
1. Discuss the accounting treatment in relation to provisions, contingent liabilities and contingent assets required by PAS 37.
2. In the case above, set out the appropriate accounting treatment as at July 31,20X7, applying PAS 37 and other relevant standards.
|
What amount of indirect cost would be assigned
: What amount of indirect cost would be assigned if services to a client required $25,000 of attorney cost and $20,000 of paraprofessional cost
|
|
Describe the economic characteristics of sunk costs
: Describe the economic characteristics of sunk costs and opportunity costs and explain the impact that these costs may have on decisions
|
|
What are share splits and what accounting entries necessary
: What are share splits and what accounting entries are necessary when a share split is undertaken? Are preference shares debt or equity
|
|
Determine the depreciation for each of the first two years
: A Kubota tractor acquired on January 8 at a cost of $189,000 has an estimated useful life of 10 years. Determine the depreciation for each of first two years
|
|
Discuss the accounting treatment in relation to provisions
: Discuss the accounting treatment in relation to provisions, contingent liabilities and contingent assets required by PAS 37
|
|
Compute the total direct materials used by Varries Company
: Ending inventory for Plastic is Php 98,000, Alloy is Php 110,000, and Copper is Php 125,000. Compute the total direct materials used by Varries Company
|
|
Compute the yield to maturity percent
: A 3.60 percent coupon municipal bond has 14 years left to maturity and has a price quote of 95.45. Compute the yield to maturity percent
|
|
What will be net profit-loss per share on a long straddle
: All options expire on December 21, 2021. What will be net profit/loss per share on a long straddle if the stock price is $10 per share
|
|
Serial dilution of a water sample
: You did a serial dilution of a water sample and the 10-7 tube when 0.1 ml was plated onto nutrient agar plates after incubation gave you 24 colonies. What is th
|