1.Provide a detailed answer to the following questions including references to the relevant provisions in the ITAA 1997 and any ATO issued interpretive guidance: a. what are the 5 elements of the cost base and reduced cost base of a CGT asset? s the cost base of a CGT asset subject to any type of modification ? what makes up the copital proceeds of a CGT asset?
Q: Research and development costs are while of the following? are classified as intangible assets.…
A: As per GAAP, if it is not clear that the expenditure will provide future economic benefit, it should…
Q: Under PAS 16, when accounting for plant, property, and equipment, a company: O May elect to use the…
A: Solution: As per PAS 16, "An entity shall choose either the cost model or the revaluation model as…
Q: - The cost of an intangible asset includes all acquisition costs plus expenditures to make it ready…
A: The initial cost of intangible assets factors into account all of the costs associated with its…
Q: 1. IAS 36 applies to which of the following assets? (a) Inventories. (b) Financial assets. (c)…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Explain the alternative methods that have been suggested to account for goodwill or excess on…
A: Intangible Assets are the non current fixed assets which can not be seen or touch. But they provide…
Q: 1. The right-of-use asset shall be initially recognized at cost, which shall be comprise of the…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: GAAP provides guidelines for the inclusion of interest in the initial cost of a self-constructed…
A: 1.
Q: Which of the following items is not a separate CGT asset for the purposes of Subdivision 108-D…
A: CGT assets: Assets that are for personal use are known as CST assets. It includes assets other than…
Q: key characteristic for theclassification of an asset as ‘held for sale’ is that the carrying amount…
A: As per IFRS 5 a non-current asset or disposal group is classified as held for sale if its carrying…
Q: Which statement on property, plant and equipment (PPE) is true? * PPE items may include assets…
A: The question is multiple choice question and related to Propert, Plant and Equipment. Required…
Q: Which of the following is not included as part of the cost of an item of property, plant and…
A: Property, Plant and Equipment refers to All fixed Asset having long useful life more than One year.…
Q: 5) Which of the following costs should always be expensed as incurred? A) the costs of externally…
A: Solution" As per GAAP, internally developed intangible assets are not capitalized unless same is…
Q: 5. According to PAS 38 Intangible Assets, if an entity cannot identify in which phase a cost is…
A: "Since you have asked multiple question we will solve the first question for you. If you want any…
Q: When does the cost of land affect an entity's profit or loss? * O When the related revaluation is…
A: The Fixed assets and Investments that are long term in nature i.e. full value of the asset cannot be…
Q: Which of the following includes only intangible assets? Group of answer choices A)Natural resources,…
A: Intangible assets are those assets which are not physical in nature.
Q: Which of the following is not a condition that must be satisfied before interest capitalization can…
A: Capitalized Interest: Interest is usually paid on the amount borrowed and it is shown as an expense…
Q: Which of the following is not a condition that must be satisfied before interest capitalization can…
A: Option b is the correct answer because the other three options are the conditions that should be…
Q: The following terms are mismatched with its definitions. Match the terms to its correct definitions.…
A: The terms are matched with the definitions in below table:
Q: nder IFRS, disclosure for an investment property must include which of the following
A: The investment property is the property that is held with an intention to earn rental income. It…
Q: Which of the following statements are correct? I. Borrowing costs incurred in the acquisition,…
A: Answer is Option c) Both I and II
Q: Which statement on property, plant and equipment (PPE) is true? * a. PPE items may include…
A: The assets of the company will provide the future economic benefits for the company. If the company…
Q: Required a. Calculate the revised carrying amount of the assets for this CGU for the year ending 31…
A: Whenever the impairment case arises, the impairment is first allocated to goodwill and then other…
Q: . Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure…
A: IASB stands for International Accounting Standards Board and helps in the preparation and issuance…
Q: Depreciation is based on the fair value of assets. An impairment loss occurs if the carrying value…
A: GIVEN Depreciation is based on the fair value of assets. An impairment loss occurs if…
Q: Which one of the following is not true concerning the treatment of investment properties under IAS…
A: If an investment property is held at fair value, this would not apply to all of the entity's…
Q: requirements of the principle of recognition and A qualifying asset is an asset that meets the an…
A: Asset is the property which the company is having or the property which company owns. Like the plant…
Q: Which of the following statements is correct?(a) Both IFRS and GAAP permit revaluation of property,…
A: Answer: Option d.
Q: 1. When reclassification is made from owner occupied property to investment property that will be…
A: Reclassification of owner occupied property to Investment property Treatment of gain or loss while…
Q: This topic is about borrowing costs. based on the problem in the picture, Please choose the letter…
A: The question is based on the concept of Accounting Standard on Borrowing Cost.
Q: Under U.S. GAAP, litigation costs to successfully defend an intangible right are capitalized and…
A: IFRS: IFRS means international financial reporting standards. It is implemented to report the…
Q: Borrowing costs that are directly attributable to the acquisition or construction of a qualifying…
A: Ans. Borrowing costs that are directly attributable to the acquisition or construction of a…
Q: Consider the following statements: I. If the financial asset is reclassified from amortized cost to…
A: IFRS 9 deals with the classification and reclassification of financial assets and liabilities. When…
Q: Included in the requirements for an intangible asset arising from development (or from the…
A: An intangible asset is the type of resource which cannot be touched or seen. It gives the authority…
Q: When an intangible asset is acquired by an exchange of assets, which of the following measures will…
A: Intangible assets are those assets which we can not see or touch. These assets can only be felt.
Q: Discuss the process of determining the fair value of the asset acquired from VLB as prescribed by…
A: MFRS 13 Fair value measurement prescribes the method which should be used to value an asset. There…
Q: PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and…
A: Solution: As per requirement of PAS 16, Increase in value of PPE, will be recognized in books by…
Q: For entities that report using IFRS, how are exploration and evaluation assets subsequently…
A: Upon Initial recognition in the statement of financial position, exploration and evaluation assets…
Q: Which of the following is true about use of the modified approach? Choose the correct.a. It can be…
A: The government uses a different way to report their financial statements than the private sector…
Q: of the VLN, acquisition cost would NOT include: A. Purchase price. B. Transportation cost to get the…
A: operating assets are the assets which are used in the day to day activities of the business. the…
Q: For borrowing costs to be capitalized as part of the cost of a qualifying asset, the following…
A: Solution Concept The borrowing cost shall be capitalized as part of the cost of a qualifying asset…
Q: Which one of the following is not true concerning the treatment of investment properties under LKAS…
A: Solution: As per LKAS 40. the investment property is measured at cost including…
Q: which of the following statements in relation to the cost of the asset is true? A. all of the…
A: The balance sheet represents the financial position of the business with assets, liabilities on a…
Q: One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant &…
A: IAS 16 deals provides a framework for accounting treatment of property plant and equipment. The…
Q: According to PFRS 9, which of the following represents a cessation of a financial asset’s impairment…
A: According to the above question option 1 is the correct answer.
Q: S1: The realization process depends on the type of the property, plant and equipment-if the…
A: The question is multiple choice question Required Choose the Correct Option
Q: According to PAS 23, borrowing costs are capitalized when * A. They relate directly to the…
A: As per PAS 23, borrowing costs are the interest costs and other costs that are incurred in relation…
Q: excluded costs from the amortization base for a full cost company?
A: Meaning of Full Cost It is a method, used by oil and natural gas companies where no differentiation…
Step by step
Solved in 3 steps
- PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.All of the following are true regarding the revaluation model allowed under GAAP except; Select one: a. Once selected, the revaluation policy applies to an entire class of property, plant and equipment. b. When an asset is revalued, any increase in carrying amount is reported as miscellaneous revenue. c. After initial recognition, the revalued amount is fair value less subsequent depreciation and impairment losses. d. Revaluations must be made regularly to ensure that the carrying value is not materially different from fair value.How should research and development costs be accounted for, according to an IASB Statement? a. Must be capitalized when incurred and then amortized over their estimated useful lives. b. Must be expensed in the period incurred. c. May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved. d. Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.
- One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. How should any claim for compensation from third parties for impairment be accounted for? How should the recoverability of the carrying amount of property, plant & equipment be accounted for? How should any revaluation surplus from a revalued asset be treated if the revalued asset is disposed of?One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic.?1) How should any claim for compensation from third parties for impairment be accounted for?2) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?3) How should any revaluation surplus from a revalued asset be treated if the revalued asset is disposed of?4) What additional disclosures should be made if property, plant & equipment are stated at revalued amounts?5) Explain the effect on the company’s financial statements if a company switches from the historical cost principle to the revaluation model? How should this change be accounted for in the financial statements?1. When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the a. original cost. b. fair value. c. carrying amount. d. recoverable amount.2. What could be a valid reason for transfers from investment property to property, plant and equipment? a. When there is a change in use b. based on the accountant's discretion c. When the entity adopts the fair value model d. when there is change in asset's life3. An entity has an investment property that is held for rental income. The entity uses the fair value model for reporting the investment property. Which of the following statement is true? a. changes in fair value are reported in profit or loss in the current period b. changes in fair value are reported as an extraordinary gain c. changes in fair value are reported in other comprehensive income for the period d. changes in fair value are…
- Required: Discuss the process of determining the fair value of the asset acquired from VLB as prescribed by MFRS 13 Fair Value Measurement.Consider the following statements:I. If the financial asset is reclassified from amortized cost to FVOCI, the financial asset is measured at fair value at the reclassification date and a new effective interest rate must be determined based on the new carrying amount or fair value at reclassification date.II. The difference between previous carrying amount and fair value of a financial asset when reclassified from amortized cost to FVPL is recognized in profit or loss.III. The cumulative gain or loss previously recognized in other comprehensive incomeis reclassified to profit or loss at reclassification date when the financial asset is reclassified from FVOCI to FVPL.IV. The original effective rate is not adjust for financial assets that are reclassified from FVPL to FVOCI.State whether the foregoing statements are incorrect.a. I and II are incorrectb. II and III are incorrectc. I and IV are incorrectd. All the statements are incorrect1. According to PAS 23, borrowing costs do not directly relate to the acquisition, construction, or production of a qualifying asset are A. Capitalized as cost of the qualifying asset. B. Expensed C. Expensed, except when the borrowing costs relate to other assets D. Any of these as a matter of accounting policy choice 2. Which of the following is a qualifying asset? A. A second-hand heavy machinery that takes 2 years to refurbish and customize for its intended use B. Biological asset measured at fair value less costs to sell C. A long-term note receivable (financial asset) D. A multi-million-dollar executive jet plane that is ready for its intended use upon purchase 3. An entity starts the capitalization of borrowing costs to the cost of a qualifying asset when * A. Expenditures for the asset are being incurred. B. Borrowing costs are being incurred. C. Activities necessary to prepare that asset for its intended…
- What costs are capitalized, or added to the asset account when acquiring property and equipment? A. Only the ticketed list price of the asset purchased. B. Any cost that is considered normal and necessary to get the asset into position and condition to be used. C. The lower of cost or net realizable value. D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property and equipment.1. IAS 36 applies to which of the following assets? (a) Inventories. (b) Financial assets. (c) Assets held for sale. (d) Property, plant, and equipment. 2. Value-in-use is (a) The market value. (b) The discounted present value of future cash flows arising from use of the asset and from its disposal. (c) The higher of an asset’s fair value less cost to sell and its market value. (d) The amount at which the asset is recognized in the balance sheet. 3. If the fair value less costs to sell cannot be determined (a) The asset is not impaired. (b) The recoverable amount is the value-in-use. (c) The net realizable value is used. (d) The carrying value of the asset remains the same. 4. If assets are to be disposed of (a) The recoverable amount is the fair value less costs to sell. (b) The recoverable amount is the value-in-use. (c) The asset is not impaired. (d) The recoverable amount is the carrying value. 5. Estimates of future cash flows normally would cover projections over a maximum…Under IFRS, disclosure for an investment property must include which of the following? Question 11 options: a) For investment properties measured using the fair value model: additions during the period, net gains or losses, and transfers to and from inventories. b) For investment properties measured using the fair value model: whether fair values used were based on valuations by an independent valuator, useful lives of properties, and transfers to and from inventories. c) For investment properties measured using the cost model: the depreciation method used, the useful lives of the properties, depreciation, and net gains or losses from fair value adjustments. d) For investment properties measured using the fair value model: amounts recognized in profit or loss for rental income and direct operating expenses, useful lives of investment properties.