Fixed Asset Depreciation Flashcards
Recognition Criteria
Cost can be measured reliably
probability of inflow of economic benefit in future
Measurement at recognition
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
After Recognition
Plant and equipment are measure at either two of model.
1 Cost model
cost of asset - accumulated depreciation - accumulated impairment loss
cost componenet
Purchase price - trade discount and rebates
Import duties
non refundable purchased taxes
directly attributable cost
estimated cost of dismantlaing removal and site resotroation
depreciation method
straight line method
reducing balance method
sum of year digit method
number of unit output method