Answered: a) Describe the circumstances in which…

a) Describe the circumstances in which the revaluation model may be used in relation to non-current assets and critically evaluate its usefulness compared to the historic cost model

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 7MC: Depreciation of a plant asset is the process of ________. A. asset valuation for statement of...

See similar textbooks

Related questions

Q: What are the major factors considered in determiningwhat depreciation method to use?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: The term that applies when an intangible asset is expensed over time rather than fully expensed at…

A: Any tangible fixed asset purchased has a fixed life throughout which it has to be used. Over the…

Q: Which of the following doesn't represent depreciation Select one: O a. It is the process of…

A: Depreciation is an accounting method that allows a company to write off an asset's value over a…

Q: Which of the following concepts is violated when measuring inventories at the lower of cost and net…

A: Solution: As per historical cost concept, in accounting value of an assets is recorded at original…

Q: What type of depreciation expense pattern is used under eachof the following methods and when is its…

A: or

Q: Which of the following concepts is not related to depreciation? Select one: a. Historical cost…

Q: Explain the difference in the accounting treatment of costs incurred to purchaseintangible assets…

Q: describe the costs associated with tangible and intangible assets, and the methods of expensing…

A: Tangible Assets: Intangible assets are tangible assets that can be touched or felt. They include…

Q: Define composite depreciation method.

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Which of the following is not a factor that limits the service life of an asset? a. Operational use…

A: Service life can be limited due to physical causes and functional causes such as deterioration,…

Q: Can the selection of a depreciation method affect a company’s asset replacement policy (i.e., the…

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: Depreciation techniques applicable to the most prevalent categories of depreciable assets might be…

A: This question explains about the most prevalent categories of depreciable assets might be…

Q: There are many terminologies used to describe the process of distributing the cost of an item over…

A: The Answer

Q: Instead of valuing assets, depreciation is a cost allocation procedure. This statement should be…

A: This question tells about depreciation is a cost allocation procedure:

Q: What general procedures are applied in accounting for the acquisition and potential cost allocation…

Q: A general description of the depreciation methods applicable to major classes of depreciable assets?

A: Depreciation is the allocation of cost of the asset over the useful life of the asset. Depreciation…

Q: Discuss the factors that influence the estimation of service life for a depreciable asset.

A: Fixed asset:It refers to the long-term assets having a useful life of more than a year which is,…

Q: Identify the factors that are relevant in determining the annual depreciation charge, and explain…

A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: Which of the following is not part of the definition of an asset O a. Control of a resource O b.…

A: Asset can be defined as a resource controlled by the entity as a result of past events from which…

Q: Same data in I1, but assuming the use of asset revaluation method, how much is the total asset…

A: Revaluation of assets is done to find out their current or present value on the basis of the net…

Q: According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about…

A: IAS 16 Property, Plant and Equipment it is an standard and this accounting treatment is totally…

Q: After recognition, exploration and evaluation assets are accounted for under the cost model…

A: There are two methods are prescribed by IAS 16 Property, Plant and Equipment for acccount for the…

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: Explain the appropriate accounting treatment required when a change in depreciation, amortization,…

A: Change in inventory method: Change in inventory method is said to be the difference between the…

Q: Explain about the existence of an active market in relation to the intangible assets and the…

A: Here discuss about the details of intangible assets and its valuation and accounting treatment which…

Q: When a number of low-cost depreciable assets with similar characteristics, service lives, and…

A: Group depreciation refers to that method of charging depreciation where the assets having similar…

Q: Under what circumstances will you consider the reducing balance method as the most appropriate…

Q: Explain the appropriate accounting treatment required when a change is made in the service life or…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: A) What is residual value? Support your answer with an example ( word count 100)

A: Lets understand the basic. When person purchase the asset they expected that after the useful life…

Q: Classify each of the following costs associated with long-lived assets as one of the following

A: Since you have posted multiple questions, we will solve the first question for you. To get the…

Q: In what ways might a depreciable asset's estimated service life be influenced?

A: The Answer

Q: Th e valuation technique under which assets are recorded at the amount that would be received in an…

A: The assets of a business can be recorded by valuation using current cost basis or the market value…

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: The terms depreciation, depletion, and amortization all refer to the process of allocating the cost…

A: Depreciation: It refers to the reduction in the monetary value of fixed tangible assets over its…

Q: under what conditions is the use of the units-of-activity depreciation methos most appropriate?

A: Depreciation is a non-cash outlay that is to be reported in the books due to regular usage of the…

Q: If a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at

A: A newly acquired asset is considered as a held for sale to a distributors when a non-current asset…

Q: What is meant by depreciation for the cost approach?

A: The cost of the property should not be more than the cost of acquiring and building the property.…

Q: According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about…

A: International Accounting standard (IAS) represents the Property, Plant, and Equipment (PPE). The…

Q: Present value of decommissioning and restoration costs are capitalized as PPE and with a…

A: Decommissioning cost is the cost which will be incurred when the asset useful life is over or when…

Q: An intangible asset may be recorded: A. if acquired from an external party at a cost. B. if it is…

A: Answer - Correct Option is A. if acquired from an external party at a cost.

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

a) Describe the circumstances in which the revaluation model may be used in
relation to non-current assets and critically evaluate its usefulness compared
to the historic cost model.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Depreciation Concepts Listed below are concepts and terminology related to depreciation. Required: Match each concept with the related terminology.
All of the following data items are likely to be included in a fixed asset record except: a. residual value of the asset b. book value of the asset c. depreciation method being used d. location of the asset e. all of the above would likely be included
Depreciation of a plant asset is the process of ________. A. asset valuation for statement of financial position purposes B. allocation of the assets cost to the periods of use C. fund accumulation for the replacement of the asset D. asset valuation based on current replacement cost data
What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.
Explain the difference between depreciation, depletion, and amortization.
Explain the key aspects of the ‘cost basis’ and ‘revaluation basis’ for non-current assets, and highlight the differences between them.
After recognition, exploration and evaluation assets are accounted for under the cost model revaluation model fair value model a or b
Which of the following most accurately reflects the concept of depreciation as used in accounting? - The process of charging the decline in value of an economic resource to income in the period in which the benefit occurred. - A method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved. - The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. - An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording the fair market value of tangible assets.
What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its life
Valuing assets at the amount of cash or equivalents paid or the fair value of the consideration given to acquire them at the time of acquisition most closely describes which measurement of fi nancial statement elements? A . Current cost
Explain the difference in the accounting treatment of costs incurred to purchaseintangible assets versus the costs incurred to internally develop intangible assets
For entities that report using IFRS, how are exploration and evaluation assets subsequently measured? Question 18 options: a) Using the cost or revaluation model. b) Using the cost model or fair value model. c) Using the cost model. d) Using the cost model or depreciation model.