Sbr (int/UK) Strategic Business Reporting

(1 mark) 

Depreciation 

In both scenarios, the depreciation charge on the building will be the same. 

This is because it will be initially recorded at the same value - $15 million. 

 

  

(1mark) 

Depreciation charges will reduce profits, reducing earnings per share under 

both proposals. 

(1 mark) 

 

(Part (b) (i): 12 marks max + 2 professional marks) 

(ii) Discussion 

Paper 

In DP/2018/1 Financial Instruments with Characteristics of Equity, the Board 

propose that a financial instrument should be classified as a liability if it 

exhibits one of the following characteristics: 

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MO CK A  ANSWER S 

K APLAN P UBLISH IN G  

 

19 

• 

‘An unavoidable contractual obligation to transfer cash or another