MGT401 Financial Accounting II GDB Spring 2020 Solution & Discussion Last Date: 09-06-2020
MGT401 GDB 1 Solution and Discussion
Total Marks 4
Starting Date Wednesday, June 03, 2020
Closing Date Tuesday, June 09, 2020
Question Title Property, Plant and Equipment
Matter of discussion
Under current situation of COVID19, it is expected that changes in the accounting standards will be required now to account for the effects of this pandemic. Considering the current situation, you are required to discuss how this pandemic will affect the disclosure of property, plant and equipment in financial statements of business entities and will it affect the treatment of borrowing cost utilized for development of property, plant and equipment.
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· Your discussion must be based on logical facts.
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The disclosure requirements of Property Plant Equipment & the borrowing costs will not change in current situation. It will change if the IAS 16 which relates to Property Plant & Equipment will change as regards disclosure requirements of Property Plant & Equipment and same is for borrowing costs whose IAS is 23.
The only change may be in the useful life of Property Plant & Equipment that is it can increase as the business is facing a huge decline and depreciation rate of Property Plant & Equipment may also decrease.