Property, plant & Equipment Flashcards
(9 cards)
1
Q
PPE models
A
*Cost model
* Revaluation model
2
Q
Cost model
A
Cost - Accumulated depreciation - Accumulated impairment loss
3
Q
Revaluation model
A
Fair value on date of revaluation
less subsequent accumulated depreciation
less subsequent accumulated impairment loss
4
Q
Subsequent measurement:
Increase / decrease in FV
A
*FV > CA
- Debt asset
- Credit OCI
(P/L if it reverses a previous devaluation expense in P/L)
* FV < CA
- Credit asset
- Debt OCI
(If there is a revaluation surplus balance from a prior revaluation & P/L with any excess)
5
Q
Revaluation surplus account
A
- If carrying amount is above historical carrying amount
- Increase is reflected in a revaluation surplus
- Recognised in OCI & accumulated in equity
6
Q
Methods for revaluation
A
- Proportionate restatement method
- Elimination restatement method
7
Q
Proportionate restatement method
A
- Proportionately restate the cost account
- Proportionately restate the accumulated depreciation
8
Q
Elimination restatement method
A
- First set off accumulated depreciation against cost account
- Adjust this cost account so that the cost account = Fair value
9
Q
A
