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IAS 16 Property, Plant & Equipment Questions and Answers $9.99   Add to cart

Exam (elaborations)

IAS 16 Property, Plant & Equipment Questions and Answers

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  • IAS & IFRS
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  • IAS & IFRS

IAS 16 Property, Plant & Equipment Questions and Answers

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  • April 17, 2024
  • 2
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers
  • IAS & IFRS
  • IAS & IFRS
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Nathan2002
IAS 16 Property, Plant & Equipment Questions and Answers Recognition of non current asset - ANS-•A tangible non current asset should initially be measured at cost.
•Capitalise any cost that is "directly attributable" to bringing the asset to its present location and condition capable of operating in the manner intended.
Asset cost to be included - ANS-•Purchase cost
•Import duties
•Non-refundable purchase taxes
•Estimate of dismantling costs at the end of the asset's useful life
•Employee costs in relation to construction or acquisition of the asset
•Site preparation costs
•Initial delivery and handling costs
•Installation and assembly costs
•Professional fees
•Cost of testing that the asset is operating properly.
Exclude the following from Asset cost - ANS-•Cost of opening the facility
•Cost of introducing a new product/service
•Costs of concluding business in a new location or with a new customer
•Administration costs
•Other general overheads
•Costs incurred while asset is capable of being used but not yet brought into use or not operating at full capacity
•Initial operating losses
•Cost of relocating or reorganising part of the entity's operations.
Where a tangible non-current asset comprises two or more major components with substantially different useful lives - ANS-each component should be accounted for separately for depreciation purposes
The asset shall be derecognised when x2 - ANS-(a) on disposal or
(b) when no future economic benefit are expected from its use or disposal.
Accounting policy exception for depreciation measurement - ANS-Change from cost model to revaluation model is an example of a change in accounting policy. Change from cost model to revaluation model is the only exception to the retrospective application rule under IAS 8.
Account for revaluation either by x2 - ANS-1. proportionately re-state the asset (Method 1); or

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