问题详情

(a)Anassistantofyourshasbeencriticisedoverapieceofassessedworkthatheproducedforhisstudycourseforgivingthedefinitionofanon-currentassetas‘aphysicalassetofsubstantialcost,ownedbythecompany,whichwilllastlongerthanoneyear’.
Required:
Provideanexplanationtoyourassistantoftheweaknessesinhisdefinitionofnon-currentassetswhen
comparedtotheInternationalAccountingStandardsBoard’s(IASB)viewofassets.(4marks)
(b)ThesameassistanthasencounteredthefollowingmattersduringthepreparationofthedraftfinancialstatementsofDarbyfortheyearending30September2009.Hehasgivenanexplanationofhistreatmentofthem.
(i)Darbyspent$200,000sendingitsstaffontrainingcoursesduringtheyear.Thishasalreadyledtoan
improvementinthecompany’sefficiencyandresultedincostsavings.Theorganiserofthecoursehasstatedthatthebenefitsfromthetrainingshouldlastforaminimumoffouryears.Theassistanthasthereforetreatedthecostofthetrainingasanintangibleassetandchargedsixmonths’amortisationbasedontheaveragedateduringtheyearonwhichthetrainingcourseswerecompleted.(3marks)
(ii)Duringtheyearthecompanystartedresearchworkwithaviewtotheeventualdevelopmentofanew
processorchip.By30September2009ithadspent$1·6milliononthisproject.Darbyhasapasthistory
ofbeingparticularlysuccessfulinbringingsimilarprojectstoaprofitableconclusion.Asaconsequencethe
assistanthastreatedtheexpendituretodateonthisprojectasanassetinthestatementoffinancialposition.
Darbywasalsocommissionedbyacustomertoresearchand,iffeasible,produceacomputersystemto
installinmotorvehiclesthatcanautomaticallystopthevehicleifitisabouttobeinvolvedinacollision.At
30September2009,Darbyhadspent$2·4milliononthisproject,butatthisdateitwasuncertainasto
whethertheprojectwouldbesuccessful.Asaconsequencetheassistanthastreatedthe$2·4millionasan
expenseintheincomestatement.(4marks)
(iii)Darbysignedacontract(foraninitialthreeyears)inAugust2009withacompanycalledMediaTodayto
installasatellitedishandcablingsystemtoanewlybuiltgroupofresidentialapartments.MediaTodaywill
providetelephoneandtelevisionservicestotheresidentsoftheapartmentsviathesatellitesystemandpay
Darby$50,000perannumcommencinginDecember2009.Workontheinstallationcommencedon
1September2009andtheexpenditureto30September2009was$58,000.Theinstallationisexpected
tobecompletedby31October2009.PreviousexperiencewithsimilarcontractsindicatesthatDarbywill
makeatotalprofitof$40,000overthethreeyearsonthisinitialcontract.Theassistantcorrectlyrecorded
thecoststo30September2009of$58,000asanon-currentasset,butthenwrotethisamountdownto
$40,000(theexpectedtotalprofit)becausehebelievedtheassettobeimpaired.
Thecontractisnotafinancelease.Ignorediscounting.(4marks)
Required:
Foreachoftheaboveitems(i)to(iii)commentontheassistant’streatmentoftheminthefinancial
statementsfortheyearended30September2009andadvisehimhowtheyshouldbetreatedunder
InternationalFinancialReportingStandards.
Note:themarkallocationisshownagainsteachofthethreeitemsabove.


请帮忙给出正确答案和分析，谢谢！