Property, Plant, and Equipment

Question 1

Tangible items held for use in production/supply of goods/services, for rental to others, or for administrative purposes

Answer 1

Property, Plant and Equipment (PPE)

Question 2

In order to be classified as PPE, it should be expected to be used during more than 2 periods.

Answer 2

False.

More than 1 period, not 2.

Question 3

Spare/replacement parts can be classified as PPE.

Answer 3

True, if it meets the criteria of PPE.

Question 4

The cost of an item of PPE includes (P D I)

Answer 4

P - Purchase price (including import duties, nonrefundable purchase taxes, after deducting trade discounts and rebates)

D - Directly attributable costs

I - Initial estimated cost of dismantling and removing the asset

Question 5

The following are examples of directly attributable costs, except for one:

a. Professional fees
b. Cost of site preparation
c. Initial delivery and handling costs
d. Cost of training staff to operate the asset properly

Answer 5

d.

This is expensed

Question 6

Net proceeds arising from sale of samples produced when testing if asset is properly functioning or not shall be recognized in profit/loss. True or false?

Answer 6

True.