Assets

Question 1

Cash and Cash Equivalents

Answer 1

Most liquid
D in SOFPS = Cash and Cash equivalents

Question 2

Trade Receivables

Answer 2

Money owed to an entity
- volume rebates - loans
D in SOFPS = Trade and other receivables
Notes:
- gross = trade / - impaired = other

Question 3

Inventories

Answer 3

Inventory held for sale
1) determine the quantity
2) Fair value (livestock) or cost (stock)
NRV > Cost use cost
NRV < Cost use NRV
D in SOFPS = Inventories
Notes:
- classes of Inv - write down of NRV

Question 4

Other Current Assets

Answer 4

Prepaid expenses (paid the cash but haven’t used up the benefits) and
accrued revenue (earned but haven’t received the cash)

Question 5

PPE

Answer 5

tangible items held for the use or supply of goods/services, for rental to others or for admin purposes. ( Cost vs Fair )
Lower btw CA or RA
D in SOFPS: PPE
Notes: Inv property disclosed separately
Gross amount, impairment, depreciation & CA

Question 6

Intangible Assets

Answer 6

Intangible Assets - No tangible property = ID $
Carried at Cost or Fair value
can be amortised for used up eco benefit

Question 7

Leased Assets

Answer 7

Cost based on all NPV payments of lease
Subject to Depreciation with class of PPE
D in SOFPS: aggregated with PPE or right-of-use assets

Question 8

Good Will

Answer 8

Calculated by
Acquisition P$ - Market Val of NA
cannot be amortized / carried at cost

Question 9

Other Financial Assets

Answer 9

Value derived from contractual claim
E.g. cash & receivables
D in SOFPS: Intangibles and OFA similar to PPE
Notes: Class, GA, CA, details of movements, amortization

Question 10

Agency Issues

Answer 10

• Cash – none, cash is just cash
• Receivables – allowance for doubtful debts can be estimated
• Inventory – choosing costs to include in the cost of inventory in order to keep the cost low, different
  cost assignment methods can be used to allocate the lowest cost price, impairment to lower of c or NRV can be chosen
• PPE – determining which costs to capitalize, choosing Cor FV to carry assets at, estimation
  of Fair Value, impairment to lower Carrying Value and Recoverable Amount, estimation as to
  Recoverable Amount, estimation of useful life and residual value, depreciation method used
• Intangibles – impairment to lower cost or recoverable amount, carrying at Cost or Fair Value, amortization method