Provide an analysis of the accounting for each fixed asset

Assignment Help Financial Accounting

Reference no: EM13135228

Construction of this equipment started on January 1, 2011 and was completed on January 1, 2012. Old Line borrowed $20.0 million denominated in US dollars on January 1, 2011 to finance construction of this equipment. The interest rate on this loan was 10%. Old Line made payments to the construction company of $10.0 million on January 1, 2011 and $10.0 million on July 1, 2011. Excess funds during this period were invested at a return of 6%. Old Line also incurred a $1.0 million exchange rate loss on other borrowings during 2011.

Required

a. Provide an analysis of the accounting for each fixed asset item using US GAAP and IFRS. Assume the Company uses straight-line depreciation for all its fixed assets and takes a full year of depreciation in the year of the addition. The accounting issues include, but not limit to, capitalization of borrowing costs, impairment and its reversal, component depreciation, and fair value reporting.

b. Based on your analysis, determine how to best maximize the amount of net fixed assets.

Reference no: EM13135228

Questions Cloud

Which internal control principle is being violated : Joe Jones has been a trusted employee for over 10 years. He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items. Which internal control principle, if any, is being violated?

Determine fourier number compare two identical steel spheres : Determine Fourier Number, Compare two identical steel spheres, except the first has a two inch diameter while the second sphere has a four inch diameter. The larger sphere will have a Fourier number approximately

Compare yourself with your past dating partner : Complete a chart comparing yourself with your current or past spouse/ dating partner on several relevant dimensions, such as educational level, attractiveness, political ideology, etc.

Prepare all adjusting journal entries required : A company purchases a piece of land for $100,000 on January 1, 2011 and chooses to report the land using the revaluation method allowed under IFRS. Prepare all adjusting journal entries required through 2015.

Provide an analysis of the accounting for each fixed asset : Provide an analysis of the accounting for each fixed asset item using US GAAP and IFRS. Assume the Company uses straight-line depreciation for all its fixed assets and takes a full year of depreciation in the year of the addition.

How is annual cash inflow determined : How is annual cash inflow determined?

Determine heat flow heat flow through a uniform wall : Determine heat flow, Heat flow through a uniform wall will: a) increase as the thermal resistance increases b) increase as the thickness of the wall increases

Net present value of the proposed project : The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:

Volume of truncated pyramid : A truncated pyramid is what is left when a plane parallel to the base cuts off the top. If a regular hexagon pyramid is truncated half way from the base to the top, what is the volume of the truncated solid if each base edge is 36 and each lateral..

User Account

All Pages