100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
IAS 16 PPE EXAM QUESTIONS & ANSWERS 2024/2025 $7.99   Add to cart

Exam (elaborations)

IAS 16 PPE EXAM QUESTIONS & ANSWERS 2024/2025

 5 views  0 purchase
  • Course
  • IAS 16 PPE
  • Institution
  • IAS 16 PPE

IAS 16 PPE EXAM QUESTIONS & ANSWERS 2024/2025 what is PPE - ANSWERStangible assets that are - held for use to produce goods/services, for rental, or for admin purposes - are expected to be used during more than one period when is the cost of PPE recognized - ANSWERS- probable that future...

[Show more]

Preview 2 out of 5  pages

  • September 7, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • IAS 16 PPE
  • IAS 16 PPE
avatar-seller
Bensuda
IAS 16 PPE EXAM QUESTIONS &
ANSWERS 2024/2025

what is PPE - ANSWERStangible assets that are

- held for use to produce goods/services, for rental, or for admin purposes

- are expected to be used during more than one period



when is the cost of PPE recognized - ANSWERS- probable that future economic benefits associated with
the item will flow to the entity

- the cost of the item can be measured reliably



what is the difference between PPE and inventory - ANSWERS- Are held for use to produce/supply goods
and services, for rental to others, or for admin purposes AND

- PPE must be used for more than one period

e.g.

- spare parts/servicing equipment = inventory

- major spare parts/stand-by equipment = PPE when expected to be used more than one period or it

can be used only in connection with an item of PPE



How is PPE measured and recoreded under IFRS - ANSWERSAt cost less depreciation

OR using the revaluation model



What is the revaluation model - ANSWERSat each revaluation date PPE is revalued to fair value

- revalued amount is amortized over the remaining useful life of the PPE

- doesn't have to be done every year (the revaluation) but needs to be frequent enough that carrying
amount doesn't differ materially

- Carrying value under this approach = FV at date of revaluation - acc dep and acc impairment losses

- if one item is revalued the entire class of PPE is revalued at the same date e.g. if one building is
revalued, all buildings need to be revalued

, What are the recognition criteria for PPE - ANSWERS- it is probable that future economic benefits will
flow to the entity AND

- the cost of the item can be measured reliably



Where do gains and losses go under revaluation method - ANSWERSInitial Revaluation

o gains - goes to other comprehensive income - revaluation surplus (OCI)

o loss - goes to profit & loss (P&L)

subsequent revaluation

o gains - goes to P&L to the extent of reversing previous losses; the remainder goes to OCI

o losses - goes to OCI to the extent of reversing gains in OCI; the remainder goes to Net Income



What are the advantages to the revaluation method - ANSWERSHigher asset value = stronger balance

sheet

Better debt to equity

Better comprehensive income if asset

increase in value



What are the disadvantages to the revaluation method - ANSWERSHigher amortization = lower net
income

Losses go through P&L

No benefit on ultimate sale since asset

already valued at FV; little or no gain on

sale of asset on P&L



What costs can be included in PPE (amortized) - ANSWERS- purchase price

- costs directly attributable to bringing the asset to location and condition necessary to use it

- estimate cost of dismantling, removing, or retiring the site where PPE is located (asset retirement
obligation)

- delivery and handling costs

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Bensuda. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

67096 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$7.99
  • (0)
  Add to cart