Discuss dono argument that warehouses should be treated

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Reference no: EM132670312

Question: Alfa-Group, together with its subsidiaries as a group, is principally engaged in the provision of integrated logistic services, which include the planning, procurement and logistics management of construction materials mainly for infrastructure projects in Banten Province.

Mr. Dono suggested in his report that no depreciation is required for the warehouses since they are investment properties rather than property, plant and equipment.

Warehouses are investment properties because rental is charged to the customers if they delay the receipt of cargoes from the warehouses.

Required: Assume that you are Mr. Kasino, the finance manager, and draft a report for Mr. Indro, the Chairman of Alfa-Group. In your report, you should discuss and comment on Mr. Dono's argument that the warehouses should be treated as investment properties so that they are not subject to depreciation.

Reference no: EM132670312

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