Amores, Vianca Pearl

BSA-4
Mme. Teresita Nilda Chan-Restificar, CPA, MAIA
Exercise 7.1
1. A
2. E
3. D
4. C
5. B
6. A
7. B
8. D
9. C
10. E*
Exercise 7.2
PROPERTY PLANT AND EQUIPMENT (PPE)
1. Is there a disclosure for each class of
PPE, the gross carrying amount and the
accumulated depreciation (including
accumulated impairment losses) at the
beginning and end of the period?
2. Is there a reconciliation of the carrying
amount in respect of each class of PPE at
the beginning and end of the period
showing:
a) additions;
b) disposals;
c) acquisitions through business
combinations;
d) increases or decreases during the
period resulting from
revaluations and from impairment
losses recognized or
reversed directly in equity under SFAS
36;
e) impairment losses recognized
during the period;
f) impairment losses reversed during
the period;
g) depreciation;
h) exchange differences from the

YE
S

N
O

N
A

REMARKS

Amores, Vianca Pearl

BSA-4
Mme. Teresita Nilda Chan-Restificar, CPA, MAIA
retranslation of PPE of
foreign entities;
i) transfers between class of PPE (e.g.
from PPE under
construction to land and buildings);
and
j) other movements?
3. For PPE stated at revalued amounts,
were the following items disclosed?
a) basis used to revalue assets;
b) effective date of revaluation;
c) whether an independent valuer was
involved;

d) nature of any indices used to determine

replacement cost;
and

e) the carrying amount of each class

of PPE that would have
been included in the financial
statements had the assets been
carried at cost less depreciation.
4. Is there a disclosure on the existence
and amounts of PPE whose title is
restricted?
5. Were the amounts of property, plant
and equipment pledged as security for
Liabilities indicated?

6. Is the amount of expenditures on

account of PPE in the course of
construction disclosed?
7. For borrowing costs, were the following
information disclosed?
a) the amount of borrowing costs
capitalized during the
period; and
b) the capitalization rate used to
determine the amount of
borrowing costs eligible for
capitalization.

8. For each class of asset that were the

subject of finance leases, is the net
carrying amount disclosed?
9. As encouraged, were the following
voluntarily disclosed?

Amores, Vianca Pearl

BSA-4
Mme. Teresita Nilda Chan-Restificar, CPA, MAIA
a) the carrying amount of temporarily
idle PPE;
b) the gross carrying amount of any
fully depreciated PPE that
is still in use;
c) the carrying amount of PPE retired
from active use and held
for disposal; and
d) when PPE is carried at cost less
depreciation, the fair value
of PPE if this is materially different
from the carrying amount.

The fair value

should be disclosed
since it is materially
different from the
carrying amount.
We assumed that
the two amounts
are materially
different because
the fair value and
carrying amount of
idle property are
materially different.

Errors:
1.) Carrying value of PPE as of December 31, 2007
a. Carrying Value per Significant Accounting Judgments and
Estimates: Php 28.7 Billion
b. Carrying Value per Supporting Schedule of PPE: Php 18,680,308
2.) Depreciation Expense for CY 2008
a. Amount per Significant Accounting Judgments and Estimates: Php
1.9 Billion
b. Amount per supporting Schedule of PPE: Php 1,691,837
3.) Loss on disposal:
a. Loss per Note11: Php 81.4 million
b. Correct Loss: Php 74.7 million
4.) The fair value should be disclosed since it is materially different from the
carrying amount. We assumed that the two amounts are materially
different because the fair value and carrying amount of idle property are
materially different