So explain and quantify how the factory should be treated, don't worry about
discontinued operations. So, go through it. We're doing the 31st of March 13.
So 31st of March, off we go! Before the year-end there's a board meeting they
decide to close down, OK, so board meeting decision. You should know by now
it's not enough for a provision. Not enough of an obligation yet,
you need to tell affected parties. A formal plan was formulated and the
factory employees were given notice of redundancy which will happen before the
Y/E, or happened before the year-end. Customers and suppliers are also
informed, so affected parties informed, OK, now we have enough for a provision.
So the question is what are we going to provide for, I guess? Okay and they've
given us the information 50 of our 250 employees will be retrained at a cost of
125,000. Training costs expensed as they occur, nothing else can't be provided for.
The remainder which is 200 (the original 250 - 50), 200 of them they
will accept redundancy at 5,000 each that's 1 million. So I can provide for so
my provision will be for the 1 million when it happens for the redundancy costs,
ok I can bring that in now because there's an obligation for it now. Factory plan has a
carrying amount of 2.2 but will only sell for 500
less 50 costs, so we'll only sell for 450 so 2,200,000
minus 450 that's an impairment of 1,750
so we've got 1.75 million impairment, you could show this impairment
separately and it's own provisions but I'll include it here.
The factory itself is expected to sell for a profit
of 2 million ok, you don't show the profit - no profit on factory shown
until sold, I'll come back to that in a second. The company rents a number of machines
and the operating leases which have an average of 3 years. All these
operating leases that can't get out of and this is the present value of these
payments what we'd have to pay is a 1,000,000 however the lessor said
look, give them us back and just pay us 850,000, okay
which would be due for payment post year-end but we can provide it because
we've told them about it pre-year end so 850,000
then for the lease costs for providing for the less amount. You know we would
have had to pay 1,000,000 further they accepted 850 so let's provide for 850 then
and then finally penalty payments because we're not gonna fulfill some of
our suppliers contracts. Again. we've told everybody so we can provide a
provision of 200,000 (0.2 million) penalties okay.
Add all that up then, it was the 3.8 million that's the provision, debit
expense in the income statement, credit provision on your balance sheet. Now the
other thing is, is that we are closing this thing down, okay, we're closing it
down and so the plant and the factory itself are now held for sale.
They are not going to be used so they're now held for sale and if anything is held
for sale it's valued at the lower of the carrying amount and the fair value minus
cost to sell. So for the factory the carrying amount is ... (the factory
is expected to sell for profit of 1.2 million). So if it's gonna sell for a
profit, this must be higher than this, so the
factory will be shown at the carrying amount, where is the plant he actually
gives us figures if you remember it was 2.2 million and 0.5 million -
0.05 million fair value less cost to sell, so it will be valued at
figure, because it's always the lower of when you come to do held for sale,
okay, that's how you answer that!
For more infomation >> Barış Hoşadam-Dert Ortağı (Official Music Video) - Duration: 3:15. 
Không có nhận xét nào:
Đăng nhận xét