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Leasehold Property - Audit Process
Exactly the same process is adopted for leasehold buildings and land as applied about freehold buildings and land except in the matter of depreciation. Here is no split between buildings and land while it is leasehold. The buildings and land are amortized over the life of the lease even if the buildings should an economic life longer than which of the lease. The argument for this is such the landlord after the end of the lease can comfortably inquire you to go and take your building and he wants his land back. The term required is amortization not depreciation.
Using the 30 September 2011 trial balance (appendix to this case study) calculate planning materiality and include the justification for the basis that you have used for your calcu
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#quInternal Audit checklist for fixed assetsestion..
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