IAS 16

Question 1

How to calculate cost model?

Answer 1

The asset is carried at cost less accumulated depreciation and impairment

Question 2

How to calculate revaluation model?

Answer 2

Asset is carried at a revalued amount - subsequent depreciation - impairment

Question 3

How to calcualte revalued amount

Answer 3

Fair value at the date of revaluation less subsequent depreciation and impairment

Question 4

Investment property

Answer 4

IAS 40

Question 5

Assets classified as held for sale

Answer 5

IFRS 5

Question 6

Biological assets related to agricultural activity

Answer 6

IAS 41

Question 7

Exploration and evaluation assets

Answer 7

IFRS 6

Question 8

What is the carrying amount?

Answer 8

Amount at which an asset is recognised in SOPL after deducting any accumulated depreciation and accumulated impairment losses

Question 9

What is fair value?

Answer 9

The estimated price at which an asset is bought or sold when both the buyer and seller freely agree on a price

Question 10

What always happens with impairment?

Answer 10

Is deducted from carrying value

Question 11

What if cost model is used in IAS 16 (depreciation)?

Answer 11

Each part of an item of PPE with a cost that is significant in relation to the total cost of the item is depreciated separately

Question 12

What does carrying amount include (replacement)?

Answer 12

Cost of replacing the part of such an item when that cost is incurred

Question 13

When each major inspection is performed?

Answer 13

Its cost is recognised in the carrying amount of the item of PPE as a replacement

Question 14

What if one item is revalued?

Answer 14

The entire class of assets to which that asset belongs should be revalued

Question 15

If a revaluation results in an increase in value? (FSs)

Answer 15

Should be credited to OCI and accumulated in equity

Question 16

A decrease arising as a result of a revaluation?

Answer 16

Recognised as an expense in SPL

Question 17

When a revalued asset is disposed of? (transfer)

Answer 17

Any revaluation surplus may be transferred directly to retained earnings

Question 18

When should the depreciation method be reviewed?

Answer 18

At least yearly

Question 19

When does depreciation begin?

Answer 19

When the asset is available for use and continues until the asset is derecognised

Question 20

What is the recoverable amount?

Answer 20

Higher of: Asset’s fair value - costs to sell AND value in use

Question 21

Where is any claim for compensation from third parties for impairment included?

Answer 21

In SPL when the claim becomes receivable

Question 22

What is value in use?

Answer 22

Refers to the present value of the future cash flows expected to be derived from an asset

Question 23

What happens with proceeds from selling items?

Answer 23

Recognised in P&L and not deducted from PPE

Question 24

When should asset be withdrawn?

Answer 24

When it is withdrawn from use and no future economic benefits are expected from its disposal

Question 25

What is the gain or loss on disposal?

Answer 25

Difference between the proceeds and the carrying amount.

It is recognised in P&L

Question 26

What non-current assets aren’t depreciated in IAS 16?

Answer 26

Land
Freehold buildings
Investment properties