#14

Question 1

Only capitalize interest on money actually spent, not on the total amount borrowed

Answer 1

Yup yup

Question 2

The amount of capitalized interest is the lower of

Answer 2

1. actual interest cost incurred, or

2. computed capitalized interest (avoidable interest)

Question 3

Interest incurred to acquire land should be

Answer 3

expensed immediately

Question 4

How to calculate revaluation gain(loss)

Answer 4

fair value - (cost - accumulated depreciation, also known as carrying value

Question 5

If a revalued asset becomes impaired, the firs step is to

Answer 5

reduce any any prior revaluation gain to zero, with further impairment losses on the income statement

Question 6

What qualifies as investment property under IFRS?

Answer 6

land and buildings to earn rental or capital appreciation

Question 7

Calculate sum-of-the-years’ digits

Answer 7

[n*(n+1)]/2

n is the estimated useful life

Question 8

In depreciation, do we look at the fair value or total cost paid for the assetf?

Answer 8

We look at fair value, because that’s how the assets are recorded

Question 9

Accumulated depreciation over the year due to PP&E retirement?

Answer 9

Prior year accumulated depreciation + current year depreciation - current year accumulated depreciation

Question 10

Calculate composite life of assets

Answer 10

depreciable cost / life in years

Question 11

Depreciable base

Answer 11

cost - salvage value

Question 12

Depreciable assets cannot depreciate below the salvage value

Answer 12

so accumulated depreciation cannot equal equal the original cost of the asset if there is salvage value.

Question 13

under GAAP, asset held for use cannot have restoration of previous impairment loss

Answer 13

Under GAAP, assets held for disposal can

Question 14

Assets’ value in use is also known as

Answer 14

PV of future cash flow