Substantive Procedures for Disposals of PPE

Question 1

Obtain a breakdown…

Answer 1

Obtain a breakdown of disposals, cast the list and review non-current assets register to confirm all assets have been removed

Question 2

Select a sample of disposals….

Answer 2

Select a sample of disposals and agree sale proceeds to supporting documentation such as sundry sales invoices

Question 3

Recalculate depreciation charge….

Answer 3

Recalculate depreciation charge for a sample of disposals to confirm calculations are correctly applied as per company policy on a pro-rata basis

Question 4

Review disclosure…

Answer 4

Review disclosure of disposals in draft FSs and ensure it is in line with IAS 16