Financial Reporting: Valuation of Assets for Starhub Ltd.

This document explores the valuation of assets, specifically focusing on property, plant, and equipment (PP&E) for Starhub Ltd. It delves into two primary valuation methods: the cost approach and the revaluation method. The cost approach, based on historical cost less accumulated depreciation, is presented as the recommended method for Starhub Ltd. The document highlights the advantages of the cost approach, including its adherence to the going concern assumption, provision of reliable information, and cost-effectiveness. It also discusses the revaluation method, outlining its principles and potential benefits. The document concludes by recommending the cost approach for Starhub Ltd., emphasizing its suitability for the company's financial reporting needs.


Financial Reporting


 Introduction
 Valuation of assets
 Cost approach.
 Revaluation method
 Method advised for starhub ltd.
 references
Table of content

 Property plant and equipment are including leasehold building,
leasehold improvements, network equipment, office equipment,
furniture, motor vehicles and constructions in process.
 These are valued at cost less accumulated deprecation.
 Deprecation is charged as per straight line method.
 Subsequent expense which are related with existing property and
increasing the capacity or life of property is capitalised.
 Subsequent expense of day to day repairing and maintenance are
included in income statement of the year.
Introduction

Figures of
property,
plant and
equipmen
t for the
year
2015-16
is :
Valuation of assets


Figures of
property,
plant and
equipment
for the
year 2014-
15 is :
Valuation of assets

 Cost means amount to be paid for acquiring assets.
 In cost approach, assets are valued at historical cost less
accumulated deprecation.
 historical price includes cost of assets and other expenses
which are necessary to bringing the asset in working
condition.
 Easy to understand
 Free from inflation of market.
 Not useful in case of inter-dependent assets.
Cost approach


• Assets should be measured at market value less
deprecation.
• Value of assets can downward or upward.
• Revaluation can done yearly
• If result of revaluation is profit, it is transferred to
“revaluation surplus”
• In case of loss, it is transferred to income statement
• According with ‘GAAP’.
Revaluation method

• Cost method is advised for starhub ltd because:
• It Follows assumption of going concern.
• Provides real, error free information.
• Based on real data not on prediction.
• Cost effective.
• Verifiability
Method advised for Starhub Ltd

 IAS-16 ‘property plant and equipment’.
 Christensen, H. B., and Nikolaev, V. V., 2012.
Does Fair Value Accounting for Non-Financial
Assets Pass the Market Test?
 Ayuthaya, N. P. N., and Swierczek, F. W., 2014.
Factors Influencing Variation in Value and
Investor Confidence. IOSR Journal of Business
and Management (IOSR-JBM). Volume 16,
Issue 5. PP 41-51.
References