IA T/F Flashcards
When the cost of a self-constructed asset is greater than the cost to acquire it from outside sources, the difference is recognized as loss if there is reliable evidence indicating that the cost is matorially excessive because of construction inefficiencies or failures.
T
If the fair value of the asset given up in an exchange transaction that hes commercial substance is not reliably determinable, the asset received is measured atits fair value, adjusted for any cash received or paid in the exchange.
F
If one party in an exchange transaction recognizes a gain, the other party will lecognize a loss
F
PPE acquired by issuing securities are always recognized at the fair value of the securities issued
F
PPE acquired from donation is initially recognized at the fair yalue of the asset given up.
F
PAS 16 defines depreciation as “the decrease in the value of an asset.
F
According to PAS 16, items of PPE are initialy measured at cost and subsequently measured using either the cost model or the fair yalue model
F
An entily acquires an asset for P120K. The asset is estimated to have a useful life of 10 years and a residual value of P20K. The straight line depreciqrion rate is 10%
T
An entify acquires an assef for P1M. Á P200K residual value is estimated for the asset. At the end of the asset’s useful life, the accumulated depreciation will be equal to P1M
F
A machine acquired on the 20th of July (and ready for its intended use as at this date) would most tkely be depreciated starting on the 1st of August,
T
According to PFRS 6, an entity shall classity exploration and evaluation assets as tangible or intangible according to the nature of the assets acquired and apply the classification consistently
T
Intangible development costs form part of the cost of a natural resource subject to depletion.
T
Restoration costs are capitalized as part of the cost of natural resource to the extent the entity has a present obligation to restore the property. The amount included in the depletion base is the fair value of the obligation to
restort the property after extraction.
T
In accounting parlance, depletion means the decrease in the economic IMe or value of a wasting asset due to extraction of mineral resources
F
Entity X acquires a mine for R1M Entity X estimates that the mine contains 1,000 units of extrectable mineral resources. During the period, Entity X extracts 100 units of mineral resources. The depletion for the period is computed as P1M x 100/1,000.
T
