Long-lived assets

Question 1

Companies generally must capitalise interest costs associated with __________

Answer 1

acquiring or constructing an asset that requires a long period of time to get ready for
its intended use

Question 2

As noted above, accounting standards require companies to capitalise software development costs _________

Answer 2

after a product’s feasibility is established.

Question 3

Under the _________, a company reports the long- lived
asset at fair value rather than at acquisition cost (historical cost) less accumulated
depreciation or amortisation, as in the cost model.

Answer 3

revaluation model

Question 4

The revaluation model is permitted under _____ but not under ______.

Answer 4

IFRS, US GAAP

Question 5

In the _________ depreciation

method, the allocation of cost corresponds to the actual use of an asset in a particular period.

Answer 5

units-of-production

Question 6

In contrast with depreciation and amortisation charges, which serve to allocate the depreciable cost of a long- lived asset over its useful life, impairment charges reflect ___________.

Answer 6

an unanticipated decline in the value of an asset.

Question 7

Impairment reversals
for identifiable, long- lived assets are ______ permitted under but typically not under
_______.

Answer 7

IFRS, US GAAP

Question 8

Capitalising an expenditure rather than expensing it results in a ____ amount
reported as cash from operations because capitalised expenditures are classified
as an investing cash outflow rather than an operating cash outflow

Answer 8

greater

Question 9

Long- lived tangible assets and intangible assets with finite useful lives are
reviewed for _______ whenever changes in events or circumstances indicate
that the carrying amount of an asset may not be recoverable.

Answer 9

impairment

Question 10

Intangible assets with an indefinite useful life are not amortised but are _________.

Answer 10

reviewed for impairment annually

Question 11

Long- lived assets reclassified as held for sale ______ to be depreciated or amortised. Long- lived assets to be disposed of other than by a sale (e.g., by abandonment, exchange for another asset, or distribution to owners in a spin- off) are
classified as held for use until disposal. Thus, they _____ to be depreciated
and tested for impairment.

Answer 11

cease, continue