Question

The balance sheet of the Sunrise Baron Hotel & Spa shows the value of the intangible assets (in thousands $) at

$1,712 (2016);

$1,127 (2015)

$1,273 (2014).

According to the relative change method of calculation, the intangible assets for 2015 have

a.	worsened by 11.5%

b.	worsened by $146

c.	improved by 51.9%

d.	improved by $585

Answer 1

b. Worsened by $146

Analysis: Intangible assets are of utmost value for a hotel industry as depicts their brand value in the industry. SInce there is a decrease in 2015 of $146 ($1127-$1273) from 2014, there is decrease by 11.46% (146/1273*100).

In this case, since we are asked to find relative change method "for" 2015, we have to compare only the data of 2014 and 2015. Data of 2016 is irrelavant here.