Exam 4: An Overview of Accounting for Assets

AASB 116 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.

Advertising costs are not typically capitalised because:

A reporting entity must have legal ownership of an asset to record it as such within its statement of financial position .

Which of the following assets are recognised at fair value?

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

Land and buildings may be valued at:

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

If an asset's carrying amount is less than its recoverable amount,the increase in value is recognised as a gain.

Discuss various measurement rules that can be adopted for measurement of assets.

Bruno Enterprises has constructed a heavy weight hydraulic lifter that it plans to use in maintaining and repairing its fleet of 18 wheeler trucks.The costs to build the lifter were wages of $11 000,raw materials of $19 000,depreciation of $4000 and supplies of $1000.Wages have not yet been paid.The equipment is judged to have probable future economic benefits of greater than its cost.What would be the accounting entry to record this event?

The effect of capitalising expenditures is to:

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

Which of the following are considered to be an asset?

The description of 'probable' in the AASB Framework means that:

When an asset's recoverable amount is less than the asset's cost,the asset's cost must be written down to recognise an impairment loss.

The term 'probable' is described in the AASB Framework as meaning that the chance of the future economic benefits arising is more likely rather than less likely.

An asset is classified as current when:

Financial institutions dealing with investments and other financial instruments prefer which method of measurement for that class of assets?

AASB 108 Accounting Policies,Changes in Accounting Estimates and Errors requires material prior period errors to be corrected retrospectively,in the period when the error was discovered.

For an asset to be recognised it is essential that it be acquired by purchase or exchange of another asset.