Fixed Asset Depreciation

Question 1

Recognition Criteria

Answer 1

Cost can be measured reliably

probability of inflow of economic benefit in future

Question 2

Measurement at recognition

Answer 2

Purchased constructed/manufactured asset are initially measured at cost
Exchanged asset are initially measured at fair value, unless
The exchange transaction lack commercial substance or
Fair value cannot determined

Question 3

After Recognition

Answer 3

Plant and equipment are measure at either two of model.
1 Cost model
cost of asset - accumulated depreciation - accumulated impairment loss

Question 4

cost componenet

Answer 4

Purchase price - trade discount and rebates
Import duties
non refundable purchased taxes
directly attributable cost
estimated cost of dismantlaing removal and site resotroation

Question 5

depreciation method

Answer 5

straight line method
reducing balance method
sum of year digit method
number of unit output method