Explain with example the capital nature and revenue nature expenses with reference to International Accounting Standard – Property Plant and Equipment (IAS 16)?
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The sale of an asset for disposal purposes is like a regular asset sale and a proper
accounting treatment is required in the books of accounts.”
- Explain with example the capital nature and revenue nature expenses with reference to International Accounting Standard – Property Plant and Equipment (IAS 16)?
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- Which of the following represents an event that is less routine when accounting for long-term assets? A. recording an asset purchase B. recording depreciation on an asset C. recording accumulated depreciation for an asset or asset category D. changing the estimated useful life of an assetBased on the knowledge that you have learned from this unit and the relevant accounting standards, answer the following questions. Your answers must demonstrate your own understandings and applications of relevant accounting standards, but not a direct quote of the standards. a.Use an example to explain what are included in the original cost of property, plant, and equipment when they are initially acquired. b. What is the basic principle for valuing property, plant, and equipment acquired in exchange for other non-monetary assets? c. Use an example to illustrate how gain or loss on disposal is calculated and recorded when an item of property, plant, and equipment is disposed of.Under IFRS, when a company chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct? a. When an asset is revalued, the entire class of property, plant, and equipment to which the asset belongs must be revalued. b. When an asset is revalued, individual assets within a class of property, plant, and equipment to which that asset belongs can be revalued. c. Revaluations of property, plant, and equipment must be made every three years. d. An increase in an asset’s book value as a result of the first revaluation must be recognized as a component of profit and loss.
- which of the basic accounting principles in the Accounting Act is particularly relevant for depreciation of property, plant and equipment. Your answer is substantiated and you must state which section of the Accounting Act is relevantUnder IFRS, when an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct?a. When an asset is revalued, the entire class of property, plant, and equipment (such as Land) to which that asset belongs must be revalued.b. When an asset is revalued, it is reported on the balance sheet at its current replacement cost.c. Revaluations of property, plant, and equipment must be made at least every three years.d. The revalued assets must be reported in a special section of the balance sheet separate from those assets measured using the cost model.In accounting for the acquisition of assets, the assets acquired are to be recorded at the ‘cost of acquisition’. How would you determine the ‘costs of acquisition’ of an asset?How are changes in accounting policies accounted for and disclosed?
- Choose the correct. Under IFRS, when an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct?a. When an asset is revalued, the entire class of property, plant, and equipment (such as Land) to which that asset belongs must be revalued.b. When an asset is revalued, it is reported on the balance sheet at its current replacement cost.c. Revaluations of property, plant, and equipment must be made at least every three years.d. The revalued assets must be reported in a special section of the balance sheet separate from those assets measured using the cost model.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…A) In accounting for the acquisition of assets, the assets acquired are to be recorded at the ‘cost of acquisition’. How would you determine the ‘costs of acquisition’ of an asset?B)How are changes in accounting policies accounted for and disclosed?
- Analyze the impact of differences between IFRS and U.S. GAAP in asset recognition and measurement rules on financial statements. You may focus on Inventories; PPE; Investment Property; Biological Assets; Impairment of Assets; Intangible Assets; Business combination and consolidated financial statements; and Borrowing costs.Which statements are correct concerning measurement of cost of property, plant and equipment?I. The purchase price of an item of property, plant and equipment is the cash price equivalent at the date of recognitionII. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and total payment is recognized as interest expense over the life of the asset.III. If an item of property, plant and equipment is acquired in exchange for a nonmonetary asset or a combination of monetary and nonmonetary asset, the cost of such item is measured at fair value unless the exchange transaction lacks commercial substance or fair value of either asset received or given up is not reliably determinable.IV. If an entity is able to determine reliably the fair value of both the asset given up and asset received in an exchange, the fair value of the asset given up is used to measure the cost of asset received in exchange.Present an argument to support the idea that your company’s land should not be depreciated, even though the property on the land is depreciated? Using practical example describe how International Accounting Standard 40 would apply to Assets in your company? Depreciation does not involve movement of cash, therefore unnecessary in accounting for an entity’s performance, Discuss?