Exam 9: Property, Plant and Equipment

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

A non-current property,plant and equipment asset is depreciated using the straight-line method over a 10 year useful life.The asset was revalued upwards after four years of use.There is no change in the remaining useful life of six years or to the residual value.Which of the following relationships reflects the effect of the revaluation on the future depreciation of the asset? Depreciation Annual depreciation Rate expense

One of the reasons for selecting the cost model over the revaluation model is because of the increased relevance of such measures.

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.

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:

Webcke Limited acquired an item of machinery with an expected useful life of 4 years.The expected total production output over this period was: year 1,30 000 units; year 2,25 000 units; year 3,15 000 units; year 4,10 000 units.The machinery cost $85 000 and the residual value is $15 000.The amount of depreciation expense recorded in the first year is:

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

Copely Limited had an existing asset revaluation surplus in respect to an item of plant that had been derecognised.An appropriate journal entry to transfer the surplus to retained earnings would include which of the following?

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

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

Disclosures under AASB 116 Property,Plant and Equipment are required on an asset-by-asset basis where the revaluation model has been used.

After an asset has been initially recognised,an entity has a choice between the cost model and the:

The depreciation expense calculated using the diminishing balance method reflects:

Under AASB 116 Property,Plant and Equipment,subsequent to initial recognition property,plant and equipment assets can only be measured using the revaluation model.

Property,plant and equipment includes items that are:

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:

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

An entity acquired an item of plant in exchange for an item of equipment.The equipment has a carrying amount of $15 000 and a fair value of $20 000.The journal entry to record the acquisition of the plant will show:

Property,plant and equipment are assets that:

Under AASB 116 Property,Plant and Equipment,the revaluation model is applied to: