As discussed with you, you are going to refer to payment amount that paid to DADB to be base of capitalization of construction in progress from work performed by DADB. Since the contract was terminated due to work inability of DADB.
Please kindly noted that for the amount of capitalization of assets in this case, should you consider the base of capitalized the assets by actual work performed by DADB (usable to continue work by new contractor) not the payment that were made to DADB? As the actual work by DADB may be less than actual payment, the assets might be overstated because the existence of work (assets) less than payment amount. Therefore, you may find a specialist to assess the work performed by DADB and consider to capitalize at the proportion of actual work.
Please also noted that the Thai Financial Reporting Standards for Non-Publicly Accountable Entities required the Company to consider on the assets regarding the impairment of assets on every accounting period, if any impairment indicators, the provision of impairment should be considered to recorded.
Moreover, we can discuss this matter in the pre-audit meeting on November 26, 2013, 10:00 am as appointed.
Test of asset impairment will be by way of an asset valuation by American Appraisal. This may be a desktop valuation.
Construction costs should be capitalised and depreciated according to the group's accounting policies.
The certifications by the consultants (specialists) will show that the value of work is equal to the payments. I had initiated this a few weeks back and had copied you in the emals. Please follow up with the consultants.
Thanks for your suggestion We will follow up with the consultants.