Chapter 8 Flashcards
Formula for declining balance depreciation
Periodic Expense = Carrying amount X declining balance percentage
formula for depreciation methods sum of years
Periodic expense = depreciable base X (remaining years/total years)
formula for depreciation usage centered
Periodic expense = depreciable base X (units produced/total units produced over life)
Do you include salvage value in double declining balance calculation?
no
how does depreciation of a asset under IFRS differ
You depreciate each part of a purchased item separately.
the composite method of depreciation is used for what?
Dissimilar assets in a group.
Monetary transactions should be based on what?
the fair value of the assets transferred.
When can you test PPE for imparement
When you think it is impaired.
Impairment amount equals
Carrying amount minus fair value
What is the carrying amount of an asset under IFRS
The greater of its fair value minus cost to sell or value in use.
Assets held for sale are measured at
the Greater of fair value minus cost to sale or carrying cost.
What 4 things are included in the depletion base.
- acquisition costs of land
- development costs
- restoration costs
- residual value (like salvage value)
how do you handle R&D conducted for others
Do not include it in R&D expense
When the nonmonetary exchange lacks commercial substance
the accounting for a nonmonetary exchange is based on the carrying amount of the assets given up. Unless boot is received, no gain is recognized.
If cash is given up in a non monetary exchange, how much of the loss is recognized in the paying parties books?
the entire loss.
