Exam 18: Property, Plant Equipment

Which of the following is not an example of a separate class of property, plant and equipment?

The cost of an asset less its residual value is referred to as its:

On 30 June 2014, Walters Limited had an item of plant with an original cost of $140 000 and accumulated depreciation of $56 000. At this date, the fair value of the plant was $100 000 and Walters Limited revalued the plant. Assuming a tax rate of 30%, the tax effect of the revaluation would be recorded as which of the following? Ircome tax expendse - OCI Dr 4800 Currert tax liability Cr 4800 Deferred tax asset Dr 4800 Incorne tax expense - OCI Dr 4800 Deferred tax asset Dr 4800 Currert tax liability Cr 4800 Income tax expense - OCI 4800 Deferred tax liability 4800

Costs of testing whether an asset is functioning property should be capitalised into the initial cost of the asset under AASB 116 Property, Plant and Equipment.

The expected physical wear and tear on an asset should be taken into account when determining the useful life of the asset.

On initial recognition of property, plant and equipment, the cost only comprises the purchase price plus an initial estimate of dismantling and/or restoration costs.

The residual value of a non-current asset is the amount or consideration actually received by an entity at the date of the asset's disposal.

Under AASB 116 Property, Plant and Equipment, the purpose of calculating the depreciation charge for a period on an item of property, plant and equipment is to measure:

Items of property, plant and equipment may only be derecognised if they are sold.

Estimated future restoration costs associated with mining land are:

When an item of property, plant and equipment is sold, the resulting gain or loss is calculated as the difference between the:

Costs of removal or dismantling an asset at the end of its useful life are measured on a present value basis and capitalised into the initial cost of the asset.

On 30 June 2014, Walters Limited had an item of plant with an original cost of $140 000 and accumulated depreciation of $56 000. At this date, the fair value of the plant was $100 000. The net effect of the journal entries necessary to record the revaluation of the plant by Walters to fair value on 30 June 2014 in accordance with AASB 116 Property, Plant and Equipment is which of the following? Accurmlated depreciation - plarit Dr 28000 Plarit 12000 Asset revaluation suplus 16000 Plart 12000 Asset revaluation suplus 12000 Gain on revaluation - OCI 12000 Asset revaluation surplus 12000 Plart 12000 Gair on revaluation - OCI 16000 Accurnulated depreciation - plart 28000

According to AASB 116 Property, Plant and Equipment, the cost of property, plant and equipment is only recognised as an asset if it is probable that the future economic benefits will flow to the entity and if:

For the purpose of the initial recognition of an item of property, plant and equipment, the date on which the fair values should be measured is referred to as the:

Hunt Limited applied the straight-line method of depreciation to its non-current assets. The cost of the buildings was $850 000, the residual value is $150 000 and the useful life is 10 years. The annual depreciation expense is:

The units-of-production method of recognising depreciation is only suitable for use by entities involved in manufacturing.

Fair value is defined in AASB 116 Property, Plant and Equipment as the amount for which an asset can be exchanged between knowledgeable willing parties in an arm's length transaction.

The depreciation expense calculated using the diminishing balance method reflects:

Under the cost model, after initial recognition an item of property, plant and equipment must be carried at its: