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 what disclosure is the entity required to make under AASB 101?

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

O'Briens Construction Ltd exchanged equipment that had a book value of $40 000 for a truck that had a book value (in the other entity's books)of $38 000.The fair value of the equipment is $45 000 and the fair value of the truck is $48 000.Further cost incurred to prepare the truck for use by O'Briens was $700 for signage.What is the acquisition cost of the truck?

AASB 101 Presentation of Financial Statements requires all current and non-current assets to be presented in the statement of financial position in the order of maturity.

Previously written-off assets are allowed to be reinstated under AASB 136 Impairment of Assets.

In a previous period Banshee Ltd wrote off its 'dynamic mover' equipment,but new information has shown that it is probable that the future economic benefits exceed its cost of $40 000.What is the appropriate accounting entry?

Bella Enterprises recorded as an asset a piece of equipment purchased for $13 000 this period.No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits.What is the appropriate accounting entry?

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?

The class of assets that is to be valued at lower than cost or net realisable value is:

A material prior period error in year ending 2009 was subsequently discovered in 2010.To comply with AASB 108 Accounting Policies,Changes in Accounting Estimates and Errors an entity should:

AASB 108 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?

The preserved body of famous Australian racehorse Phar Lap is an example of a heritage asset.

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?

It is expected that the service potential of a non-current asset will decline over time.The appropriate accounting treatment is to:

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

For an asset to be recognised,it is required to possess a cost or other value that can be measured exactly.

Under AASB 101 the classification of assets into current and non-current will depend on the entity's:

If the expected value in use of an asset is more than its market value,then it is expected that the entity will retain the asset.

Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities,AASB 101 requires items to be disclosed on the face of the statement of financial position ,including:

Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset.These characteristics include: