a. Exchange difference arising between spot rate on the date of bill of lading and forward cover rate. Whether this difference is to be capitalized when pertaining to purchase of fixed asset or to be charged off as revenue. How will you treat the above in UK books and Indian Books? In Indian books earlier it used to be capitalized but now it is to be charged off as revenue

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Dear Experts,
I shall be grateful if anyone can advise me on the following:
An Investment Fund (thereafter the “fund”) was established in April 2009 with the aim of investing, on behalf of the subscribers, on the local stock exchange.
The fund incurred the following expenses, classified as “Initial set up fees” amounting to US 5600, at its creation in the statement of financial position (Balance sheet);
(i)                  Payment to a consultant for legal advise amounting to US 1700
(ii)                License fees amounting to US 3400
(iii)               …

Hi,
I would like to know if the high costs of migrating markets, being already a traded fund, can be capitalized and further write off the costs over a period of at least 3 year.
Is this possible or should these costs be expensed?
Eli

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How would you treat a fixed asset in the situation below?
The energy supplier operates a piece of equipment rented from the government for a defined period of time. In the end of the period the company should transfer the asset back to the government.
The energy supplier makes an agreement with the government, according to which the company makes some inseparable improvements to this equipment and the government reduces the rental fee by 50%. The improvements form a separate component of fixed assets.
The company capitalizes expenses for the new component construction, …

Dear Experts,
If accounts receivables from a customer is $1000. The customer d
does not pay and court orders that assets of customer can be sold by the seller and settle against accounts receivables. What is the accounting treatment as per IFRS.
Whether assets acquired from customer is to be treated as asset held for sale and accounts receivables can be credited.
Whether on sale of assets revenue is to be recognised less cost of removal of assets.

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When arranging a long term loan mortgage fees are paid. Are these fees to be considered as ancillary borrowing cost and should be included in calculation of the effective interest rate?
Thanks,
Ilian Dimitrov Gotzev

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Dear all,
This is my first participation in this forum. i have a question regarding the land as an operating lease.
We have a leased land used for a project. Currently the lease rent is being capitalised as land costs- Property Under Development, on the basis that this costs incurred to bring the assets into operations.
My questions are:
1- Can the above treatment considered correct in anyway?
2- We want to transfer the land and building from PUD to Investment Property- what options do we have?
3- Are there any conditions to have the compination …

We are planning to take Franchise of One Brand, for this we are paying following amounts :-
1)      Initial Fees – this we have to pay only once.
 2)      Royalty – Every Year it is payable @ % on sales.
 3)      Additional Fees – this fees we have to pay them if we open another location also.
We need your advice that can we capitalized 1st and 3rd and write off the period we are taking the franchise, like we are planning for 5 years

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Dear all
Seasons greetings!!
We have purchased a fixed asset with value of USD 100,00/- specifically at the request of our client. We had the same equipment, but the client need two instead of one and the client agreed to reimburse the cost of additional one, once we install the same on site.
I just want to know whether I can capitalise the equipment as fixed asset in my books of account and claim depreciation on the asset.
The asset will be in our name and we are the owners of the asset. …

I work in a company specialized in doing MRO for aircrafts, the issues that the work orders of the maintenance and repair takes from a month to 4 months direct salaries and materials are issued to the tasks and salaries are expensed in monthly basis and appears in the P&L while revenue will recorded once the job is completed and invoice is issued
Percentage of completion is not adopted, and the idea is to charge the cost to job order as work in progress (balance sheet) and recognize the revenue and …

Dear all,
We have given a contract to ship builders for construcing a vessel. As per the contract terms, if the builder delay the delivery of the vessel beyond agreed delivery date, they have to give us penalty of USD 10,000 per day. Now they have delivered the vessel after 373 days of the agreed date and we have received the penalty from them. How we can account the penalty income in our books, either as penalty income or by reducing the capital cost of the vessel. Kindly refer relevant IFRS …

we have a contract for development of a fixed assets, as per the contract:-
Total Contract amount =  260 Million AED
We have to pay this amount in Euro that is already fixed as per the contract it is 4.49 AED per Euro
whatever is the rate prevailing currently doesnt matter bcoz it has been already fixed in contract,
so my concern is exchange loss on payment will be added to the value of fixed Assets or
will have to transferred to P&L A/c

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Can someone please share thoughts around generic accounting issues in the marine industry. The nature of activities will involve using small ships (bareboat) to provide marine terminal services to clients on ports around the world ? From the top of my head, I can see following major issues to be considered:
- Revenue recognition
- Repair cost of ships and capitalisation of subsequent cost
- Treatment of lease income /expense if boats are let out/taken on lease
- Derivative accounting issues (long term fuel contracts ?)
Any other issues or more light on above highlighted …

Case:
 Party gets into a long term construction contract to prepare the machinery which takes 2 years to complete
 Cost elements – Labor $ 3mm and Materials $ 5mm Total $ 8mm
Revenue against – Labor $ 10mm and Materials $ 10mm Total $ 20mm
Margin – Labor 70% Material 50% on total project 60%
 Year 1 Cost incurred Labor $ 4mm and Material $ 2mm
 What should be the revenue that can be recognized against the same? The policy is % completion method.
 Business contention to recognize revenue on 70 and 50% margins respectively.
 What the …

Can the arrangement fee (agengy fees, structuring fee and legal charges) paid to obtain a long term loan be deferred and subsequently amortised over the tenure of the Loan?
Kindly give references from IFRS.
Regards,
Ali

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Question for anyone that has dealt with this issue:
As at its transition date, a company will need to review its assets (CGUs) for indicators of impairment. Some of the indicators suggested in IAS 36 refer to “the period”. Some indicators are current – as of that date.
I have assumed that “the period” refers to the previous annual period. This assumption is based on” (a) the fact that for a regular year, the period would refer to the previous annual period, and (b) IFRS 1 indicates that the same estimates used …

Hi all,
Any idea on this please…
a lease to own vehicle for two years. but a bank will finance the monthly lease fee. how should this be treated and booked?
thanks!
Brenda

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Dear Experts,
As we know that cash flow from operating activities includes changes in Accounts Paybles. This seems okay for a company having accounts payables related to company’s normal operational expenses. But what if Accounts payable includes payable against normal operating expenses and payables against construction of buildings.
Company’s business is constrcution of buildings and lease on rent under IAS 17.
If payables against construction is included in cash flow from operating activities it gives a large value of cash inflow from operating activites if 2007 payables paid out in 2008.
Do …

Hi All,
I would  like to know what the best treatment for Free Goods offerd from a supplier to a retail pharmaceutical company . Actulay the offer is presented in two types :
1- implicit in the vendor invoice as an additioanl free quantity with a 0 value , means the invoice contain both priced goods with $ value and additional free goods with 0 value.
2- Seprate free shipment with a total 0 value invoice.
Please advice the accounting treatment for this case.?
Thanks

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