Resolved Question

Help in calculating the payments to acquire additional Non-current Assets for my indirect cash flow forecast!?

In theory to calculate the payments to acquire additional NCA you do:
Carrying value of the Assets the previous year + Any Additions (purchases of fixed assets made this year) - the carrying value of the assets at end of this year.
But using this method, my cash flow forecast does not add up.
It adds up when i do:
Fixed Assets at Cost the previous year + Any additions - Carrying value at end of this year.
Is this wrong??

In 2008 the figures were
Fixed Assets at Cost 920
Accumulated Depreciation 100

In 2009 the figures were
Fixed Assets at cost 1190
Accumulated depreciation 220

O ye, to calculate the Additions i simply calculated the difference between last years Fixed Assets at cost and last years fixed assets at cost.
Is this right?

If you were to calculate depreciation for 2009 what would you get??

Thank you very much in advance!

Best Answer - Chosen by Asker

It is always helpful to prepare a T account for the Fixed assets at cost and Accumulated depreciation. However, as far as your problem goes, the additions during the year 2009 are 1190-920=270 and the depreciation charge is 220-100=120. This is assuming that there has been no disposal of fixed assets during the year.

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