Section B - Case 1: NovaGrid (Question 1 of 5)
Scenario: NovaGrid, a telecom infrastructure company, entered into a contract on 1 January 20X5 to build a specialized network for a client and maintain it for 2 years. The total contract price is $1,200,000. If sold separately, the network build would cost $1,000,000 and the 2-year maintenance would cost $400,000. The network was completed and handed over on 31 December 20X5.
Additionally, NovaGrid leased a specialized crane on 1 January 20X5 for 3 years. Payments are $50,000 annually in arrears. The implicit interest rate is 5%. (PV of $1 annuity for 3 yrs at 5% = 2.723).
Question: Under IFRS 15, how much of the total transaction price should be allocated to the network build performance obligation?
ACCA · Question 19 · Leases
Section B - Case 1: NovaGrid (Question 4 of 5)
Scenario: NovaGrid, a telecom infrastructure company, entered into a contract on 1 January 20X5 to build a specialized network for a client and maintain it for 2 years. The total contract price is $1,200,000. If sold separately, the network build would cost $1,000,000 and the 2-year maintenance would cost $400,000. The network was completed and handed over on 31 December 20X5.
Additionally, NovaGrid leased a specialized crane on 1 January 20X5 for 3 years. Payments are $50,000 annually in arrears. The implicit interest rate is 5%. (PV of $1 annuity for 3 yrs at 5% = 2.723).
Question: What is the depreciation charge for the Right-of-Use asset for the year ended 31 December 20X5?
Answer options:
$50,000
$45,383
$47,652
$136,150
32 questions · hints · full answers · grading
Expert