F4 Fixed Assets

Question 1

Costs capitalized for plant asset include…

Answer 1

insurance on machine while in transit
testing and preparation for machine for use
(any cost incurred to acquire and make ready a plant asset is capitalized)

Question 2

Capitalized interest equals:

Answer 2

LESSER of

• total interest (specific and general)
• weighted avg amount accumulated exp interest/avoidable interest

Question 3

county assessment for sewer lines

Answer 3

included in cost of land

Question 4

Revaluation surplus

Answer 4

recorded in OCI

Question 5

Revaluation loss

Answer 5

I/S - first get rid of surplus in OCI, remaining in I/S

Question 6

Calculating Revaluation loss/surplus

Answer 6

difference between fair value and CV (Historical-accum).

If fv is greater= surplus

Question 7

Under IFRS how is investment property recorded

Answer 7

Investment property may be reported at cost less accumulated depreciation or fair value. When investment property is reported at fair value, it is not depreciated.

nvestment property is reported at cost less accumulated depreciation, fair value must be disclosed.

Question 8

IFRS Revaluation performed on…

Answer 8

Under IFRS, if an individual fixed asset is revalued, then the entire class of fixed assets to which that asset belongs must be revalued. Individual fixed assets CANNOT be revalued alone

Question 9

Conditions exist in order for impairment loss to be recognized under GAAP

Answer 9

if CV amount is greater than FV and CV is not recoverable

step 1: future undiscounted CF compared to CV - if future CF is less - could be impairment

Step 2: FV - CV = impairment loss