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IAS 16 Accounting for Property Plant and Equipment Exam Questions & Answers 2024/2025
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IAS 16 Accounting for Property Plant and Equipment Exam Questions & Answers 2024/2025
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IAS 16 Accounting for Property Plantand Equipment Exam Questions &
Answers 2024/2025
What criteria must PPE meet to determined as an asset - ANSWERS1) Able to be measured reliably
2) Have future economic benefits
IAS 16
What are the two valuation models - ANSWERSCost model
Revaluation model
What is the equation for the cost model - ANSWERSCost of assets - accumulated depreciation - any
impairment losses
What is the definition for depreciation - ANSWERSthe systematic allocation of the depreciable amount of
an asset over its useful life
Revaluation Model - ANSWERSThis model is used if there is a gain/ loss in the value of PPE which is
recorded in OCI and revaluation reserves. When using this model PPE must be regularly revalued to
ensure that the carrying amount is represented at their fair value
What is the equation for revaluation Model - ANSWERSCarrying amount =Fair value - any depreciation -
any impairment losses
Conditions for Revaluation Model - ANSWERS- Fair value can be measured reliably
-FV can be measured at regular intervals-
-All assets in a category must be revalued
Accounting for revaluation gain - ANSWERSi) Not reversed gain ( no previous loss on PPE
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