Tangible Non-Current Assets (Chapter 3) Flashcards Preview

ACCA F7: Financial Reporting (Intl) > Tangible Non-Current Assets (Chapter 3) > Flashcards

Flashcards in Tangible Non-Current Assets (Chapter 3) Deck (14)
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1

What does accounting standard IAS 16 cover?

Property, Plant & Equipment

2

Tangible Non-Current Assets definition

Tangible items that are held by the an entity for
1. Production or supply of goods/services

2. Rental to others

3. Admin purposes

3

What is the recognition criteria for PPE?

1. Cost must be able to be reliably measured.

2. Probable future economic benefits.

4

How is PPE measured at recognition?

Purchase Price + Directly Attributable Costs + Finance Costs + Subsequent Costs.

5

What is included in directly attributable costs for cost measurement at recognition?

Employee Benefit Costs i.e. wages
Site Preparation
Initial Delivery and Handling Costs
Installation and Assembly Costs
Professional Fees
Costs of Testing
Site Restoration i.e. provision for dismantle

6

What are the two methods for measuring PPE after recognition?

1. Cost Model

2. Revaluation Model

7

What is the formula for using the cost model?

Cost - Accumulated Depreciation/Impairment Loss

8

What is the formula for the revaluation model?

Revalued Amount - Accumulated Depreciation/Impairment Loss

9

Where is a revaluation gain charged to in the financial statements?

Other comprehensive income under revaluation surplus

10

How do we account for a revaluation loss?

First take amount away from revaluation surplus and charge any remaining balance to the P/L.

11

Which IAS covers Investment Property?

IAS 40

12

Define Investment Property

Land or buildings that are used for rental income or capital appreciation.

13

Fact: Any gain or loss from investment property is charged straight to the P/L under investment income/costs.

Investment property gains or losses DO NOT go to revaluation surplus.

14

What is the definition of directly attributable costs?

Costs of bringing the asset to location and condition necessary to be capable of operating as intended by management.