accounting for property, plant and equipment
RELEVANT TO ACCA QUALIFICATION PAPER F7
The accounting for IAS 16, Property, Plant and Equipment is a particularly important area of the Paper F7 syllabus. You can almost guarantee that in every exam you will be required to account for property, plant and equipment at least once.
This article is designed to outline the key areas of IAS 16,
Property, Plant and Equipment that you may be required to attempt in the F7 exam.
IAS 16, Property, Plant and Equipment overview
There are essentially four key areas when accounting for property, plant and equipment that you must ensure that you are familiar with:
¤ initial recognition
¤ …show more content…
This will enable Yucca to increase production without the need to purchase a new machine.
Should the additional expenditure be capitalised or expensed?
(See page 5 for the solution to Example 3.)
student accountant issue 19/2010
Studying Paper F7?
Performance objectives 10 and 11 are relevant to this exam
A gain on revaluation is always recognised in equity, under a revaluation reserve (unless the gain reverse’s revaluation losses on the same asset that were previously recognised in the income statement – in this instance the gain is to be shown in the income statement). The revaluation gain is known as an unrealised gain which later becomes realised when the asset is disposed of (derecognised).
Depreciation is defined in IAS 16 as being the systematic allocation of the depreciable amount of an asset over its useful economic life.
In other words, depreciation applies the accruals concept to the capitalised cost of a non-current asset and matches this cost to the period that it relates to.
There are many methods of depreciating a non-current asset with the most common being:
¤ Straight line
¤ % on cost or
¤ Cost – residual value Useful economic life
¤ Reducing balance
¤ % on carrying value
An item of plant was purchased on 1 April 2008 for $200,000 and is being
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In analyzing factors attributable to the change in a firm's operating income from one year to the next, which of the following effect(s) may be included in the price-recovery factor?
When a corporation distributes appreciated property, it must recognize gain as if it sold the property for its FMV immediately before the distribution. For gain recognition purposes, a property’s FMV is deemed to be at least equal to any liability to which the property is subject or that the shareholder assumes in connection with the distribution. A corporation recognizes no loss when it distributes to its shareholders property that has depreciated in value. A corporation’s E&P is increased by any E&P gain resulting from a distribution of appreciated property. A corporation’s E&P is reduced by (a) the amount distributed plus (b) the greater of the FMV or E&P adjusted basis of any non money property distributed, minus © any liabilities to which the property is subject or that the shareholder assumes in connection with the distribution. E&P also is reduced by taxes paid or incurred on the corporation’s recognized gain, if any.
A corporation that distributes property that has appreciated in value must recognize a gain at the time of distribution. The corporation is treated as if it had sold the property. The gain equals the property 's fair market value less its adjusted basis. Code Sec. (b). However, the corporation does not recognize a loss if the property had declined in value. Also, the corporation recognizes no gain or loss if t distributes its own stock rights to its shareholders. Code Sec. (a). The character of the recognized gain depends on the property distributed; thus it may be ordinary income, capital gain, or Section 1231 gain.
Gross profit ratio had been declining through the period of 2008-2010, which indicates decrease of markup that the company achieved on its inventory, which also means that it lowered sales prices compared to costs.
In this final paper I' am going to tell you about how important taking the exams to become in the medical field. The AAMA exam is important because you have to take the exam to become apart of the medical field. You also have to take the AMBA exam. All the exam that you have to take to become apart of the medical field are important. They will determine whether or not you will be apart of the medical field. In this paper I' am going to explain to you why the exam is important to take.
Target Corporation was founded in 1902 by George Dayton, a banker and real estate investor, the original name was Dayton Dry Goods Company, later in 1911 becoming Dayton Department Store, and in 1962 becoming Target a discount chain store. Target and its iconic red bulls-eye, named because it is a marksman’s goal to hit the center mark, much as it was Target’s goal to do the same in terms of retail goods, services, community commitment, price, value, and overall experience (Target.Com, 2012). 1967 saw Target grow from a regional department store to national retailer. In 2009 Target
As a guide, someone who doesn’t know your work should be able to read your answer and fully understand and appreciate what work you have completed. Use these sample answers as a guide, and remember that you will also need to talk through your answers with your workplace mentor – which gives you another opportunity to demonstrate your achievement and gain sign off.
know what it is exactly, in order to assess the extent to which the accounting profit reflects
The objective of AASB 116 is to stipulate the accounting treatment for property, plant and equipment, make user can understand information about an entity’s investment in its property, plant and equipment, and the changes in entity’s investment. The main issue for property, plant and equipment in accounting are the recognition of relationship between assets, the determination of their carrying amounts, the depreciation charges and impairment losses. AASB 116 required the entity disclose it’s information of gross carrying amount, depreciation method, depreciation rate, useful lives of PPE, accumulated depreciation and reconciliation of carrying amount at beginning of the reporting period and at end of the reporting period.
When working with adult population, a counselor could use the ACCI. The ACCI will allow the counselor to identify their client development task concerns and exploration of resources in choosing a career (Niles & Harris-Bowlsbey, 2013). In addition, this method is good because it can help address individuals who find it challenging in updating their task in their current field.
Ron Barber, CPA, is auditing the financial statements of DGF, Inc., a publicly held company. During the course of the audit, Barber discovered that DGF has been making illegal bribes to foreign government officials to obtain business, and he reported the matter to senior management and the board of directors of DGF.
Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is “Measurement” (Mattessich, 1977)