BABU RAO LIMITED:

LAND BUILDING PLANT VEHICLE TOTAL

COST / FV AS AT JULY 1 2021 25,000 75,000 196,000 7,500 303,500
ACC DEP AS AT JUL 1 2021 - (5,000) - (2,500) (7,500)
25,000 70,000 196,000 5,000 296,000

COST / FV:
AS AT JULY 1 2021 25,000 75,000 196,000 7,500 303,500
Addition W1 - - 183,937.50 2,000 185,938
Disposal - - - (1,500) (1,500)
Adjustment agains Acc dep - (10,000) (38,547.66) - (48,548)
Revaluation:
FROM P&L 5,000 (15,714) - - (10,714)
FROM Surplus - (9,285.71) 48,610.16 - 39,324
30,000 40,000 390,000 8,000 468,000

ACCUMULATED DEP:
AS AT JULY 1 2021 - 5,000 - 2,500 7,500
Depreciation for the year - 5,000 38,548 1,092 44,640
Disposal - - - (528.00) (528)
Adjustment against cost - (10,000) (38,548) - (48,548)
- - - 3,064 3,064

DEPRECIATION WORKING PLANT:

OPENING BOOK VALUE OF PLANT 196,000 x 15% x 12 /12 29,400

ADD: DEP ON CONSTRUCTED PLANT 123,937.50 x 15% x 3 /12 4,648
ADD: DEP ON SEPERATELY ACQUIRED 60,000.00 x 15% x 6 /12 4,500
38,548
DEPRECIATION WORKING Vehicle:

OPENING BOOK VALUE OF VEHCILE 5,000

LESS: OP BOOK VALUE OF DISPOSAL (1,080.00)
(1,500 - (1,500 x 20% x 6 / 12)) x 80%
3,920.00 x 20% x 12 /12 784
Add: Vehicle disposal dep 1,080.00 x 20% x 6 /12 108
Add: Vehicle Addition 2,000.00 x 20% x 6 /12 200
1,092
WORKING 1:
PLANT USING RUNNING FINANCE

AUG 1 2021 15,000 x 15% x 2 / 12 375.00 CAP

OCT 1 2021 50,000
OCT 1 - DEC 65,000 x 15% x 3 / 12 2,437.50 CAP
JAN 1 2022 (20,000)
JAN 1 - FEB 45,000 x 15% x 2 / 12 1,125.00 CAP
29 FEBR 2022 65,000
REM BAL LOAN 110,000 x 15% x4 / 12 5,500.00 P&L
 CAPITALIZATION COST:

PAID TO CONTRACTOR 130,000

PAYABLE TO CONTRACTOR 10,000
140,000
DEF GOVT GRANT - NET (20,000)
120,000
ADD: BORROWING COST 3,937.50
123,937.50

TILL 29 FEB
CASH 130,000
RF LOAN 130,000

BANK RF LIAB 20,000

CASH 20,000

CWIP PLANT 140,000

PAYABLE to Contractor 10,000
CASH 130,000

CASH 20,000
DEF GOVT GRANT 20,000 ---> to be netted against cost of asset

DEF GOVT GRANT 20,000

CWIP 20,000

REVALUATION:
LAND FV 30,000
5,000 --> FROM P&L 15,000 ALLOWED
CA 25,000

BUILDING

CA 65,000
SURPLUS BAL OP 10,000
LOSS DECLINE (25,000)

FAIR VALUE 40,000 INC TRANSFER (714.29) 10,000 / 14

---> SURPLUS 9,285.71
PLANT
FV 390,000
SURPLUS 48,610.16
CA 341,389.84
 Land Building Plant Furniture Warehouse TOTAL
Cost / Fair value as at Jan 1 2022 1,500,000 5,500,000 5,400,000 2,200,000 4,000,000 18,600,000
Acc Dep as at Jan 1 2022 - (2,316,667) (1,635,000) (860,000) (922,000) (5,733,667)
1,500,000 3,183,333 3,765,000 1,340,000 3,078,000 12,866,333

COST / FAIR VALUE

Balance as at Jan 1 2022 1,500,000 5,500,000 5,400,000 2,200,000 4,000,000 18,600,000
Addition 1,500,000 1,500,000 - 460,000 - 3,460,000
Disposal - - - (550,000) - (550,000)
Transfer from Investment Property - 2,500,000 - - - 2,500,000
Adjustment agains accumulatd Dep - - - - (1,075,900) (1,075,900)
Revaluation:
Surplus 300,000 - - - 75,900 375,900
P&L (300,000)
Transfer to Investment property - - - - (3,000,000) (3,000,000)
3,000,000 9,500,000 5,400,000 2,110,000 - 20,310,000

Accumulated Dep / Impairment

Balance as at Jan 1 2022 - 2,316,667 1,635,000 860,000 922,000 5,733,667
Depreciation for the year W1 - 545,833.33 376,500 202,900.39 153,900.00 1,279,134
Disposal - - - (139,111) - (139,111)
Adjustment Against Cost - - - - (1,075,900) (1,075,900)
Impairment for the year - - 20,019 - - 20,019
- 2,862,500 2,031,519 923,789 - 5,817,808
NET BOOK VALUE / FV 3,000,000 6,637,500 3,368,481 1,186,211 - 14,492,192 BS

WORKING 1: DEPRECIATION EXPENSE

1 BUILDING
OPENING COST 5,500,000 366,666.67
15 years

ADD: ADDITION OF SHOWROOM BUILDING 1,500,000 x 4 /12 33,333.33

15 years

ADD: TRANSFER FROM IP 2,500,000 x 7 / 12 145,833.33

10 years
545,833.33

2 PLANT
OPENING BOOK VALUE PLANT 3,765,000 x 10% x 12/12 376,500

3 FURNITURE

OPENING BOOK VALUE FURNITURE 1,340,000

LESS: OP BV OF FURNITURE SOLD (438,281)
(550,000 - (550000 x 15% x 5 /12)) x 85%
FURNITURE ELIGIBLE FOR FULL YR DEP 901,719 x 15% x 12 /12 135,257.81
Add: Dep on furniture disposed 438,281 x 15% x 5 /12 27,392.58
Add: Dep on furniture addition 460,000 x 15% x 7 /12 40,250.00
202,900.39
4 Warehouse

Opening Book value 3,078,000 x 10% x 6 / 12 153,900.00

REVALUATION:

FAIR VALUE AT THE DATE OF TRANSFER 3,000,000

75,900
WAREHOUSE CA 2,924,100

LAND
OLD LAND - CA 1,500,000
SURPLUS BAL AVAILABLE 200,000
(500,000)
(200,000) SURPLUS
FAIR VALUE 1,000,000 (300,000) P&L
 FV 2,000,000
500,000 SURPLUS

NEW LAND CA 1,500,000

IMPAIRMENT TESTING:

2,500,000
AUG 1 2019 acquired 2,500,000 x 10% x 5 /12 104,166.67 2019
2,395,833.33 x 10% x 12 /12 239,583.33 2020
2,156,250.00 x 10% x 12 /12 215,625.00 2021
1,940,625.00 x 10% x 12 /12 194,062.50 2022
CARRYING AMOUNT 1,746,562.50

RECOVERABLE AMOUNT
FV - CTS 1,400,000
VIU 1,726,543 RA HIGHER

(20,019)

2023 2024 2025 2026 2027

1 2 3 4 5
800,000 500,000 450,000 350,000 125,000
PV at 12% 714,285.71 398,596.94 320,301.11 222,431.33 70,928.36

TOTAL PV 1,726,543.45
PRACTICE CLASS 5 - PPE + B.COST + GOVERNMENT GRANT

ACQUISITION DATE OF ASSET -----> APRIL 1 2019 COST = 300 Million

50% OF THE COST IS FINANCED BY THE GOVERNMENT

REST OF THE 50% is to be Financed by the Company Rs. 150 million

APRIL 1 2019 ---> SPECIFIC LOAN Rs. 90 million

1. SPECIFIC LOAN ACQUIRED ON APRIL 1 2019

LOAN ACQUIRED = 90 Million x 14% x 9 / 12 = 9.45 B COST TOTAL FOR 9 MONTHS FTY 2019

2. SPECIFIC LOAN ACQUIRED ON DEC 1 2019

LOAN ACQUIRED = 30 Million x 15% x 1 / 12 = 0.375 B COST TOTAL FOR 1 MONTH FTY 2019

SURPLUS WORKING:

APRIL 1 2019 SURPLUS BAL 240.00

LESS: PAYMENT TO Plant Supplier (300.00)
APRIL 1 2019 DEFICIT GEN BORROWING (60.00) x 23.94% x 6 / 12 = (7.18) 6 Months Int from Apr - Sept 30
OCT 1 2019 Installation payment (30.00)
(90.00) x 23.94% x 1 / 12 = (1.80) 1 Month Int from Oct 1 - 30 Oct
NOV 1 2019 Installation payment (75.00)
(165.00) x 23.94% x 2 / 12 = (6.58) 2 Month Int from NOV 1 - 31 DEC
DEC 31 2019 Repayment from Govt grant 30.00
(135.00)

W.AVG RATE OF CAPITALIZATTION:

AVG INTEREST
OUT BAL INT EXP
BANK P 250.00 25% 62.50
BANK Z 280.00 23% 64.40
530.00 126.90 23.94% W.AVG RATE OF CAPITALIZATION

Apr-19 CASH 150.00

Deferred Govt Grant 150

Apr-19 CASH 90.00

Bank Specific loan @14% 90

Apr-19 PPE - CWIP 240.00

CASH 240.00

Apr-19 Cash 60.00

General Borrowing 60.00

Apr-19 PPE - CWIP 60.00

CASH 60.00

Oct-19 Cash 30.00

General Borrowing 30.00

PPE - CWIP 30.00

CASH 30.00

Nov-19 Cash 75.00

General Borrowing 75.00 165.00
 Nov-19 PPE - CWIP 75.00
CASH 75.00

1st DEC 2019 Cash 30.00

Specific Loan @ 15% 30.00

PPE - CWIP 30.00

Cash 30.00

31st DEC 2019 Cash 30.00

Deferred Govt Grant 30.00

General Borrowing 30.00

Cash 30.00

CWIP - PPE AMOUNT

TOTAL COST OF PURCHASE 300.00

ADD: Installation cost
OCT 1 2019 30.00
NOV 1 2019 75.00
DEC 1 2019 30.00
135.00 TOTAL COST OF PURCHASE AND INSTALLATION COST
ADD: Borrowing cost
- SPECIFIC BORROWING 1 3.15 9.45 / 9 x 3 OCT 1 - DEC 31 2019
- SPECIFIC BORROWING 2 0.375 MONTH OF DEC
- General Borrowing 8.38
11.90519 BCOST TO BE CAPITALIZED DURING 2019
TOTAL CWIP in 2019 446.91

AS AT 31 DEC 2019 STATEMENT OF PROFIT OR LOSS

NON-CURRENT ASSET
PROPERTY PLANT AND EQUIPMENT - CWIP 446.91
INTEREST EXPENSE FOR THE YEAR 125.19
(126.90 - 8.38) + (9.45 + 0.375 -3.15)
NON-CURRENT LIABILITIES
SPECIFIC LOAN 1 90.00
SPECIFIC LOAN 2 30.00
BANK P 230.00
BANK Z 260.00
Deferred Government Grant 180.00

CURRENT LIABILITIES
Interest payable 136.73
126.90 + 9.45 + 0.375