FAR 3A Flashcards
Which of the following is a required footnote disclosure on property, plant, and equipment? A. Range of useful lives of plant assets. B. Depreciation methods of plant assets. C. Accumulated depreciation related to plant assets. D. All of the above.
D. All of the above
The gain or loss on the___________is part of continuing operations as it is expected that a company will sell existing assets from time to time as the assets are replaced.
sale of an asset
If neither debt issuances were identified as the construction loan, the interest rate must be determined based on the
weighted average of the interest on all of the debt outstanding during the year
Costs that increase EITHER the useful life OR productivity/utility are
capitalized
Choose the best association of terms in the natural resources accounting area with the conceptual framework. A. Successful efforts method-matching. B. Full costing method-definition of asset. C. Depletion-fair value accounting. D. Successful efforts method-definition of asset.
D. Successful efforts method-definition of asset.
When remeasurement to fair value is used, it must be
applied to the entire class or components of PPE
Under IFRS the impairment loss can be recovered if the asset is held for
use or disposal
The greater of fair value less cost to sell or value in use is the
recoverable amount according to IFRS.
The test for impairment for an asset in use is whether the carrying value (book value) is less than its
recoverable cost
The plant asset must have a useful life extending more than…
one year beyond the Balance Sheet date.
$200,000 equipment had an estimated useful life of five years and a salvage value of $20,000. Depreciation was computed by the 150% declining balance method. What is the depreciation for years 1 and 2?
Yr 1 = $200,000(1.50/5) = $ 60,000 Yr 2 = ($200,000-$60,000)(1.50/5) = 42,000 Note: Salvage value is not deducted. But, it must not depreciate the asset below salvage value.
Cantor Co. purchased a coal mine for $2,000,000. It cost $500,000 to prepare the coal mine for the extraction of the coal. It was estimated that 750,000 tons of coal would be extracted from the mine during its useful life. Cantor planned to sell the property for $100,000 at the end of its useful life. During the current year, 15,000 tons of coal were extracted and sold. What would Cantor’s depletion amount be per ton for the current year?
($2,000,000 + $500,000-$100,000)/750,000 = $3.20. This rate is applied to the units removed each period to determine depletion for that period.
Under IFRS, when remeasurement to fair value is used, it must be applied to the…
entire class or components of PPE.
When would an unrealized gain or loss on the transfer of an investment (which does not give the investor significant influence) from one classification to another classification not be recognized in current net income?
Transfer from held-to-maturity to available-for-sale
