Exam 4: An Overview of Accounting for Assets

Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities,IAS 1 requires items to be disclosed on the face of the statement of financial position ,including:

Which of the following items is not considered capitalisable cost of property,plant and equipment?

Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities what disclosure is the entity required to make under IAS 1?

Before an asset can be recognised,the framework requires that an asset satisfy the element that it has some future economic benefits.Discuss the ways wherein future economic benefits can be determined.

The decision to expense or capitalise an item is important because:

An asset is classified as current when:

IAS 16 Property,Plant and Equipment allows both cost and revaluation models to be applied as a measurement basis to one class of property,plant and equipment.

When constructing an item of property,plant and equipment,which of the following conditions must be met,for a borrowing cost to be capitalised at the commencement date?

According to the IASB Conceptual Framework an asset should have a number of characteristics,including:

Recoverable amount of an asset is defined in IAS 36 as the higher of its fair value less costs to sell and its value in use.In the case where an asset's carrying amount is less than its recoverable amount,which action is consistent with IAS 36?

'Recognised' in relation to asset disclosure may be defined as meaning:

Future economic benefits can only be derived from the sale of an asset.

IAS 8 Accounting Policies,Changes in Accounting Estimates and Errors specifies the accounting treatment for changes in accounting policies,correction of errors and changes in accounting estimates.Which of the following statement(s)in relation to these items is/are true?

IAS 1 Presentation of Financial Statements requires us to consider an entity's normal operating cycle.Explain what a normal operating cycle is.

Relevance and faithful presentation are important considerations for determining the format to use for the purposes of presenting the statement of financial position.

If the entity received a donated asset the entity must:

Previously written-off assets are allowed to be reinstated under IAS 36 Impairment of Assets.

Golden Co Ltd has donated a vehicle to Bushman Enterprises as a result of publicity about the plight of Bushman Enterprises after bushfires destroyed most of its fleet of vehicles.The vehicle had cost Golden Co £25 000 and has accumulated depreciation of £10 000.Its market value is £20 000.How should the asset transfer be recorded in both companies' books?

How should borrowing costs relating to an asset being constructed over a substantial period of time be treated in the financial statements?

An accountant is not sure about how to recognise an asset that is purchased in excess of fair value.Which of the following action will you recommend?