Cheat Deck!

Question 1

Depreciation notes

Answer 1

• Depreciation always happens at the end of the period, never at the beginning.
• Include the year of acquisition when calculating depreciation!

Question 2

Determining the assets recoverable amount

Answer 2

The higher of Value In Use Less Cost to Sell/Dispose or Fair Value (market value)

(an impaired asset

Question 3

Determining Inventory value

Answer 3

Inventory must be measured at the lower of cost or NRV to reflect potential losses.

Question 4

How to calculate profit before tax

Answer 4

Net income from P/L + non cash expenses (e.g. depreciation) - profit on sale of disposed assets (as they are not from operating activities)

Question 5

Valuing an asset that is classified for held for sale

Answer 5

The lower of its carrying amount or fair value less cost to dispose.

Question 6

IAS 1 states that a complete set of financial statements includes

Answer 6

Statement of financial position
Statement of profit or loss and other comprehensive income
Statement of changes in equity
Statement of cash flows
Accounting policies note