Fixed Assets Flashcards
What are the different classifications of fixed assets?
Land, buildings, equipment and accumulated depreciation
At what costs are fixed assets shown on the balance sheet?
Historical cost
How is historical cost measured under US GAAP?
Cash or cash equivalent price of obtaining the asset and bringing it to the location and condition necessary for its intended use
What are donated fixed cosgts recorded at?
Fair market value
Where is the gain from donated fixed assets recorded on?
Income statement
What is the journal entry to record a donated fixed asset?
Dr. Fixed asset, Cr. Gain on nonreciprocal transfer
What are the two valuation models under IFRS?
Cost and revaluation model
What is the formula for cost model carrying value
Historical cost - accumulated depreciation - impairment
What is the formula for revaluation model carrying value?
Fair value at revaluation date - subsequent accumulated depreciation - subsequent impairment
Where are revaluation losses reported?
Income statement unless revaluation loss reverses a previously recognized revaluation gain
Where are revaluation gains reported?
Other comprehensive income and accumulated in equity unless the revaluation gain reverses a previously recognized revaluation loss
How is impaired recorded?
First reducing revaluation surplus then further impairment losses reported on income statement
What is the journal entry to record an addition?
Dr. Fixed asset, Cr. Cash/Accounts payable
When capitalizing improvements and replacements, if the carrying value of the old asset is known what occurs?
Remove the old asset and recognize any gain or loss
When capitalizing improvements and replacements, if the carrying value of the old asset is unknown what occurs?
The asset’s life is extended(debit accumulated depreciation for the cost of the improvement/replacement) and the usefulness of the asset is increased(capitalize the cost of the improvement/replacement to the asset account
