7.NCA

Question 1

What are characteristics of non current assets?

Answer 1

For long term use, can be tangible or intangible, can generate income directly or indirectly, not liquid

Question 2

What are 2 types of expenditures?

Answer 2

Capital - acquisition of NCA or expense on existing asset to increase earning capacity (including purch, delivery, legal fees, trials/test)

Revenue - current asset, admin cost, maintenance of nca(repair, renewal, admin, training)

Question 3

What’s the purpose of depreciation?

Answer 3

To spread cost of asset over period it will be used

Question 4

What are depreciation methods ?

Answer 4

Straight line - same each year, cost less residual value over useful life or cost x depr%

Reducing balance - % x carrying amount