Hi, Would it be possible for someone to clarify why you do not include the depreciation of the plant and equipment in the profit and loss and SBF, as I thought the depreciation of all non-current assets were included in the profit and loss statement? In the examiner's report, it appears that they only include the depreciation of the property? Many thanks
Hi You're right that the depreciation should be included in the profit or loss statement. Usually, the depreciation figures given in the trial balance in an exam question are the accumulated figures to the start of the year and the question provides the information needed to work out the depreciation charge for the current year and incorporate it into the profit or loss. In this question, unusually, we’re not told how to work out depreciation for plant and equipment for the current year, so we can just assume that the depreciation for the year has already been charged, ie it is already included in the accumulated depreciation figures and the relevant profit or loss expense line (eg manufacturing costs). Hope this helps
