15 Flashcards
deck 15
what is included in cap’d cost of a building?
only the interest incurred during construction and total cost of DL, DM, and OH
how is a patent amortized?
over the SHORTER of its est. life or remaining UL
how are identifiable costs in regards to IA’s treated?
they are cap’d, even on an internally dvp’d IA
what does it mean when an exchange has commercial substance?
- amt of FCF changes as a result of nonmonetary exch
- recog. gain in full
- amt of CF does not change, but risk and timing of CF chanegs
when is it acceptable to cap. interest for constr?
during delays in obtaining permits to complete building constr.
what are the 3 requirements to cap. int for an entity?
- int cost is being incurred
- EXPEND’S have been made
- all necessary permits have been filed to prep the asset for its intended use
(not borrowed funds to finance asset)
what is the period to cap. int on the average accu. expend’s actually incurred?
at the date they begin constr. to the date the constr. is substantially complete and ready for use
when using comp. dep. method by an entity:
parts or comp’s of a FA that are replaced should be de-recog’d
*derecog’d comp’s are still subtracted from cost, but do not depreciate to add their DE in the mix
are minor parts included in component depreciation?
no, they are excluded, and so are repairs and maint. costs
what is an accurate comparison of composite vs comp. dep?
annual DE is more accurate under comp. dep
what is the proper treatment for multiple FA revaluation under IFRS?
do not net reval. surplus/loss. each FA is separate
what is FA amt if using the cost model (IFRS) to revalue assets?
FA amt = OG cost - AD - IL
is there a G/L recog’d when 1 asset in a composite group is sold?
no, no G/L
is MACRS compatible with comp. dep?
no, but SL is
will DV LIFO be higher or lower than reg. LIFO in a falling price environment?
it will be LOWER in falling price environments
is cost of equity included in cap’d int?
no, it is not treated as cap’d int. it is actually subtracted from the average accu’d expend amt.
in regards to INVENTORY, when is cap’ing int. permitted?
only for inv. on hand that is a special order for a customer, NOT for high-end mfg’d inv.
which inv. valuation method is best to determine economic value of EI?
DV LIFO b/c of the changing price levels of inflation/deflation
at what level is GW tested for impairment?
RU level OR at 1 level below an operating segment
is quality control (routine testing) in R&D?
no, it is not expensed to R&D
