Fichas
Tangible assets
Fichas del conjunto (48)
- 1To which biological assets IAS 16 can be applied?bearer biological assets, especially plantation trees such as grape
vines, rubber trees and oil palms, - 2Explain PPEAre held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes
– Are expected to be used during more than one period - 3When are single assets broken down into components?For very large and specialised items. This occurs where the different parts have different useful lives and different depreciation
rates are applied to each part - 4Explain initial measurement of PPE?Once an item of property, plant and equipment qualifies for recognition as an asset, it will initially be
measured at cost. - 5What is included in cost of PPE a?its purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates. - 6What is included in cost of PPE b?any costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management. - 7How the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located should be treated?As a capital expenditure. This expenditure should be discounted back to Pv and added to cost of PPE and overall should be depreciated. Also, this discounted figure should be unwound each year.
- 8How should be costs of employee benefits (as defined in IAS 19 Employee Benefits) arising directly from the construction or acquisition of the item of property, plant and equipment treated?As a capital expenditure
- 9Example of directly attributable costs part b,c,d, f?costs of site preparation;
initial delivery and handling costs;
installation and assembly costs; - 10Example of directly attributable cost part e?costs of testing whether the asset is functioning properly, after
deducting the net proceeds from selling any items produced while
bringing the asset to that location and condition (such as samples
produced when testing equipment); - 11How should costs of opening a new facility be recognised?As an expense, not capital expenditure
- 12How should costs of introducing a new product or service (including costs of advertising and promotional activities) be recognised?As an expense
- 13How costs of conducting business in a new location or with a new class of customer (including costs of staff training) should be recognisedAs an expense
- 14How administration and other general overhead costs should be recognised?As an expense
- 15When does recognition of costs cease?when the item is in the location and condition necessary for it
to be capable of operating in the manner intended by management - 16Provide an example of costs which can be incurred after PPE is ready part a (costs are not capitalised)costs incurred while an item capable of operating in the manner
intended by management has yet to be brought into use or is operated at
less than full capacity; - 17Provide an example of costs which can be incurred after PPE is ready part b (costs are not capitalised)initial operating losses, such as those incurred while demand for the
item’s output builds up - 18Provide an example of costs which can be incurred after PPE is ready part c (costs are capitalised)?costs of relocating or reorganising part or all of an entity’s operations
- 19How assets are measured when these assets are exchanged?at fair value, unless the exchange transaction lacks commercial substance or
the fair value of neither of the assets exchanged can be measured reliably. - 20How exchanged assets are measured if fair value cannot be measured reliably?at the carrying amount of the asset
- 21How assets can be recognised after initial recognition?Cost model and revaluation model
- 22What does frequency of valuation depend on?volatility of the fair values of individual items of property,
plant and equipment. - 23How often useful life of PPE should be reviewed?at least at each
financial year end - 24What is cost?the amount of cash or cash equivalents paid or the fair value of the other consideration
given to acquire an asset at the time of its acquisition or construction. - 25What is residual value?net amount which the entity expects to obtain for an asset at the end of its
useful life after deducting the expected costs of disposal. - 26What is entity specific value?present value of the cash flows an entity expects to arise from the
continuing use of an asset and from its disposal at the end of its useful life, or expects to incur
when settling a liability - 27When should a tangible asset be recognised?It is probable that future economic benefits associated with the asset will flow to the entity
(b) The cost of the asset to the entity can be measured reliably - 28When should charge for depreciation begin?Depreciation must be charged from the date the asset is available for use,
i.e. it is capable of operating in the manner intended by management.
This may be earlier than the date it is actually brought into use, for example
when staff need to be trained to use it. Depreciation is continued even if the
asset is idle. - 29How often depreciation method should be reviewed?at least at each financial year end and, if there has
been a significant change in the expected pattern of economic benefits from those assets, the method
should be changed to suit this changed pattern. - 30When the change from one method of providing depreciation to another is permissible?only on the grounds that the new method will give a fairer
presentation of the results and of the financial position
• does not constitute a change of accounting policy
• is a change in accounting estimate. - 31How overhauls are treated under IAS16?When each major
inspection is performed, its cost is recognised in the carrying amount of the
item of property, plant and equipment as a replacement if the recognition
criteria are satisfied. Any remaining carrying amount of the cost of the previous
inspection (as distinct from physical parts) is derecognised. - 32What is first requirement of revaluation?Revaluations must subsequently be made with sufficient regularity to
ensure that the carrying amount does not differ materially from the fair
value at each reporting date. - 33What is second condition of revaluation?When an item of property, plant and equipment is revalued, the entire
class of assets to which the item belongs must be revalued. - 34Where transfer from revaluation to retained earnings should be shown?it is shown in statement of changes in equity
- 35What is 1st step in recognising gain or loss in sale of revalued asset?It should be accounted for in the statement of profit or loss of the period
in which the disposal occurs. - 36What is 2nd step in recognising gain or loss in sale of revalued asset?The remainder of the revaluation surplus relating to this asset should
now be transferred to retained earnings. - 37Which one of this is directly attributable - start up and similar pre-production or testing?start up and similar pre-production are not;
but testing is directly attributable - 38How initial opearting losses before the asset reaches planned performance should be recognisedAs an expense
- 39How should professional fees be recognised?As a capital expnediture. (added to cost)
- 40How wasted material, labour, in all, abnormal costs should be recognised when self-constructing assets?They are excluded from cost/ (expensed)
- 41When subsequent expenditure should be capitalised? 1st condit enhances the economic benefits provided by the asset (this could
be extending the asset's life, an expansion or increasing the
productivity of the asset) - 42When subsequent expenditure should be capitalised? 2nd condit relates to an overhaul or required major inspection of the asset –
the costs associated with this should be capitalised and depreciated
over the time until the next overhaul or safety inspection - 43When subsequent expenditure should be capitalised? 3rd cond?it is replacing a component of a complex asset. The replaced
component will be derecognised. A complex asset is an asset made
up of a number of components, which each depreciate at different
rates, e.g. an aircraft would comprise body, engines and interior. - 44Is Administration and other general overhead costs included in PPE costs?No
- 45Is testing costs included in PPE costs?Yes
- 46Are professional fees included in PPE cost?Yes
- 47Are Start-up and similar pre-production costs inlcuded in PPE costs?No
- 48Are abnormal wastage costs included in PPE costs?No
Información
- Descripción
- ACCA FR (F7) Fichas sobre Tangible assets, creado por Archimed Nemes el 17/01/2019.
- Creado por
- Archimed Nemes
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