IAS-16

1. Residual value is specifically:

2. Useful life of an asset refers to the life:

3. Spare parts and servicing equipment are usually accounted for as:

4. Individually-insignificant items, such as moulds, tools and dies may be:

5. Repairs and maintenance costs are normally:

6. If the costs of a major inspection (for example, aircraft) are capitalised:

7. Elements of cost are: (i) The purchase price (ii) Any costs directly attributable to bringing the asset to the location (iii) The initial estimate of the costs of dismantling, and removing the item (iv) Overheads of the purchasing department relating to the buy of the asset.

8. Directly attributable costs include: i. staff costs arising directly from the construction, or acquisition, of the item of property, plant and equipment; ii. site preparation costs; iii. initial delivery and handling costs; iv. costs of testing whether the asset is functioning properly, after deducting the net proceeds from any samples, or sundry income; and v. professional fees. vi. costs of opening a new facility; vii. costs of introducing a new product, or service (including costs of advertising and promotional activities); viii. costs of running a business in a new location, or with a new class of customer (including costs of staff training); and ix. administration and other general overhead costs.

9. Recognition of costs (to be capitalised) ceases when:

10. The following costs should be accounted for as: (i) costs incurred while an item, capable of operating in the manner intended by management, has yet to be brought into use, or is operated at less than full capacity; (ii) initial operating losses, such as those incurred while demand for the item’s output builds up; and (iii) costs of relocating, or reorganising part, or all, of an undertaking’s operations.

11. Incidental income and expenses (such as using a site as a temporary car park) should be:

12. Internal profits generated, when creating a self-constructed asset, should be:

13. If payment for a fixed asset is deferred beyond normal credit terms, any additional payment above the cash cost of the asset will be accounted for as:

14. If one or more assets are exchanged for a new asset, the new asset is valued at:

15. In the case of an exchange of assets, if the acquired asset cannot be valued:

16. An undertaking can choose either the cost model or the revaluation model, as its accounting policy, it must apply the chosen model to:

Using the cost model, the asset in accounted for at:

Using the revaluation model, can fair values be estimated, if there is no market-based evidence?

Revaluations are required:

When an item is revalued, any accumulated depreciation at the date of the revaluation is treated in which of the following ways:

21. Examples of separate classes of fixed assets are: (i) land. (ii) land and buildings. (iii) machinery. (iv) ships. (v) aircraft. (vi) motor vehicles. (vii) furniture and fixtures. (viii) office equipment. (ix ) stationery

22. A class of assets may be revalued on a rolling basis, provided:

23. If an asset’s carrying amount is increased by revaluation, the increase is;

24. If an asset’s carrying amount is decreased by revaluation and there is no revaluation reserve, the decrease should be:

25. Transfers of amounts between Equity – Revaluation Reserve and retained earnings are allowed

26. Depreciation charges for a period are recorded:

27. Changes in the estimated useful life should:

28. The carrying value of your asset is $10. Its fair value is $12. Do you continue depreciation?

29. The carrying value of your asset equals the residual value. Do you continue to depreciate it?

30. Regular repair and maintenance preserves the value of your hotel. Do you continue to depreciate it?

31. Your asset has a residual value. Do you continue to depreciate it?

32. Depreciation can cease when an asset is idle.

33. In determining the useful life of an asset, consider: (i) Expected usage of the asset. (ii) Expected physical wear and tear. (iii) Technical, or commercial obsolescence. (iv) Legal, or similar, limits on the use of the asset. (v) Interest rates.

34. Land and buildings are separate assets, as:

35. You buy land and building. The land is revalued at double its cost. Do you continue to depreciate the building?

36. A variety of depreciation methods can be used. These methods include the straight-line method, the diminishing balance method and the units of production method. The choice of depreciation method is governed by:

37. Compensation from third parties for items impaired, lost or sequestrated should be recorded as income:

38. The carrying amount of an item of PPE will be derecognised:

39. A gain on the sale of an asset should be recorded as:

40. The gain, or loss, arising on the sale of an asset is:

41. Which of the following items qualifies as property, plant and equipment?

If your land is leased under a finance lease, do you depreciate it?