Investor Presentaiton
CATA
CA Demolition cost
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Example
•
A Ltd purchased a land with a building that is unusable for total consideration of
Rs 200 million.
The building is demolished after purchase and a new building will be
constructed instead.
.
The total cost paid to a 3rd party to demolish - Rs 10 million.
.
•
Both the land and the new building meet the definition of IP and A Ltd uses the
cost model under LKAS 40.
It is determined that any other market participant acquiring the land would
demolish the current building
■ Building does not meet the definition of an asset (no economic benefits)
The economic rationale behind the purchase was to acquire land rather than
land and building
■ All consideration paid (Rs 200 million) should be allocated to the land
■ Demolishing cost - site preparation cost and would be capitalised
CAT
CA Disclosure
THE INSTITUTE OF
CHARTERED ACCOUNTANTS OF SRI LANKA
Extensive disclosure requirements (in additional to IAS
1, for leased properties)
FV model - disclosure requirements of SLFRS 13 and
LKAS 40
•
-
Cost model fair value disclosure,
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