... are subject to the requirements of this act, which demand strict legislation regarding a company's accounts. They therefore have to adhere to the FRS they deem necessary and they have to show evidence of this in their accounts. The company values it's tangible fixed assets i.e. buildings & land at historic costs1. Choosing to provide depreciation on a straight-line basis over the anticipated useful economic lives of the assets. By doing so they are following the transitional provisions in the FRS 15 regarding total fixed assets. The Reporting Standard recognizes that due to macro-economical forces prices may increase or decrease over time, which may result in a change in the purchasing power of money. By stating that the open market value would significantly exceed the net book value of £6 billion, they are letting potential investors know that a current valuation of their properties are worth far more 2. Prior to ...

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