Here are two ways in which PPE acquired in the year could be found. One is by adding the Subs PPE in the movement so that we get the acquired PPE in the year through payment and the second way is to deduct the Subs PPE from closing PPE. The logic in 2nd method is, that when we compare the opening and closing of PPE, the opening never had a Subs balance but the closing did, so we are not making a like-to-like comparison, to have a like-to-like comparison and find the cash paid to acquire PPE in the year we remove the impact of Subs PPE from closing balance.
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PPE DONE WRONG
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Here are two ways in which PPE acquired in the year could be found. One is by adding the Subs PPE in the movement so that we get the acquired PPE in the year through payment and the second way is to deduct the Subs PPE from closing PPE. The logic in 2nd method is, that when we compare the opening and closing of PPE, the opening never had a Subs balance but the closing did, so we are not making a like-to-like comparison, to have a like-to-like comparison and find the cash paid to acquire PPE in the year we remove the impact of Subs PPE from closing balance.