Case Stimulus
The statement below is an extract of property, plant and equipment from the “notes to the financial statements” of ABC Plc: Land and buildings Plant, equipment, fixtures and fittings and motor vehicles Total Costs ₦ ₦ ₦ At January 1, 2020 75,230,481 120,454,850 195,685,331 Additions 12,540,000 16,000,500 28,540,500 Acquisitions through business combinations 24,400,000 35,750,430 60,150,430 Classified as held for sale (10,200,450) (15,450,600) (25,651,050) Disposals (5,000,465) (10,700,250) (15,700,715) At December 31, 2020 96,969,566 146,054,930 243,024,496 Accumulated depreciation and impairment losses At January 1, 2020 46,660,254 66,675,860 113,336,114 Depreciation charge for the year 5,594,523 17,220,518 22,815,041 Classified as held for sale (7,650,338) (9,270,000) (16,920,338) Disposals (3,762,523) (9,034,069) (12,796,592) Impairment losses 5,267,533 6,022,713 11,290,246 Reversal of Impairment losses (4,515,028) (4,818,170) (9,333,198) At December 31, 2020 41,594,421 66,796,852 108,391,273 Net carrying amount At December 31, 2020 55,375,145 79,258,078 134,633,223 At December 31, 2019 28,590,212 53,778,390 82,368,602 The above was the situation of the statement of financial position of the company when it was signed at the board of directors meeting. During further review to sign-off the audit file, it was discovered that the classification of some of the assets as impaired was due to wrong classification and the value had actually increased due to a new road network in the location. This affected the impairment losses for the year. The new value of the buildings affected and shown in the note above as available from market survey had actually grown to ₦8.5million within the period under review.