Valuation - auditing process, Auditing

Assignment Help:

Valuation - Auditing Process

IAS 16 requires that all assets for use through the business have been valued on the basis of depreciated historic costs along with one exception. As IAS 16 states which freehold land should not be depreciated except in the event which the reduction in value is because of depletion through assuming an example mining or because of changed economic circumstances. The cause for not depreciating freehold land is simply apparent where one looks at the definition of depreciation.

Depreciation is the portion of historic costs over the needful life of the asset.  As freehold land has no finite needful life, then there is no basis for calculating depreciation.  Freehold buildings have been depreciated and the auditor might check which the estimated needful life is reasonable and which the calculations have to be correctly made. Therefore the split between freehold buildings and the land on such land must be established being reasonable.


Related Discussions:- Valuation - auditing process

Disclosure requirements - investment, Disclosure Requirements - Investment ...

Disclosure Requirements - Investment In common terms, the following items have to be disclosed in the concern to all investments: (a) The accounting policies about:-

Stake holder group, The assignment continues the research process by furthe...

The assignment continues the research process by further exploring and defining the problem statement through the development of research objectives. These objectives will allow yo

Statistical sampling-Advantages, Statistical sampling – Advantages a) It ...

Statistical sampling – Advantages a) It is scientific and defensible; b) It provides a precise mathematical statement about probabilities of being correct; c) It is efficie

Bank - cash and bank balances, Bank - Cash and Bank Balances The major...

Bank - Cash and Bank Balances The major concern in this area is to establish the existence of the balances and more currently due to failures in some financial institutions in

Audit, Why is studying Auditing different from studying other accounting to...

Why is studying Auditing different from studying other accounting topics?

Internal Audit., #quInternal Audit checklist for fixed assetsestion..

#quInternal Audit checklist for fixed assetsestion..

Auding , What are the are the advantages and disadvantages of auditing an I...

What are the are the advantages and disadvantages of auditing an IT firm

Audit risk, AUDIT RISK As we have seen many parties rely on the audit o...

AUDIT RISK As we have seen many parties rely on the audit opinion to make decisions, and therefore it is now a well established fact that if the auditor gives an audit opinion

Discontinued operations - audit of accounting estimates, Discontinued Opera...

Discontinued Operations - Audit of Accounting Estimates A discontinued operation is a component of an entity that either has been disposed of or is held for sale. So it might

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd