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Egzaminy > International accounting standards 8 > Flashcards

International accounting standards 8 Flashcards

1
Q

Property, plant and equipment/ plant assets/fixed assets (znaczenie)

A

rzeczowe aktywa trwałe

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2
Q

characteristic of property, plant, and equipment

A
  • Assets of a durable nature
  • “Used in operations” and not for resale.
  • Long-term in nature and usually depreciated.
  • Possess physical substance
  • Includes: Land, Building structures (offices, factories, warehouses), and Equipment (machinery, furniture, tools).
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3
Q

acquisition (znaczenie)

A

nabycie

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4
Q

Acquisition and measurement:

A
  • are measured at historical cost (equivalent price of obtaining the asset and bringing it to the location and condition necessary for its intended use)
  • In general, costs include:
  • Purchase price, including import duties and non-refundable purchase taxes, less trade discounts and rebates.
  • Costs attributable to bringing the asset to the location and condition necessary for it to be used in a manner intended by the company.
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5
Q

Cost od land (znaczenie)

A

koszty gruntów

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6
Q

Cost of land:

A
  • All necessary costs incurred in making land ready for its intended use increase (debit) the Land account
  • cash purchase price
  • closing costs such as title and attorney’s (adwokat) fees
  • real estate brokers’ commissions
  • accrued property taxes and other liens on land assumed by purchaser
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7
Q

accrued property taxes (znaczenie):

A

naliczone podatki od nieruchomości

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8
Q

liens on land (znaczenie)

A

zastawy na gruntach

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9
Q

Land improvements (znaczenie)

A

ulepszenie terenu

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10
Q

depreciation expense (znaczenie)

A

amortyzacja ŚT

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11
Q

Characteristic of land improvements:

A
  • Improvements with limited lives, such as private driveways, walks, fences, and parking lots
  • Investment - Land acquired and held for speculation
  • Inventory - land held by a real estate concern for resale
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12
Q

Cost of buildings:

A
  • Includes all expenditures related directly to acquisition or construction
  • Professional fees and building permits
  • Remodeling and replacing or repairing the roof, floors, electrical wiring, and plumbing
  • Materials, labor, and overhead costs incurred (poniesione) during construction
  • Companies consider all costs incurred, from excavation to completion, as part of the building costs
  • Purchase price, closing costs (attorney’s fees, title insurance, etc.) and real estate broker’s commission
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13
Q

excavation (znaczenie)

A

wykopy

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14
Q

Cost of equipment:

A
  • Include all costs incurred in acquiring the equipment and preparing it for use
  • Cash purchase price
  • Non-deductible sales taxes (VAT, excise – akcyza)
  • dreight charges
  • insuarance during transit paid by purchaser
  • Assembling (złożenie), installing, and testing
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15
Q

non- deductible (znaczenie)

A

niepodlegające odliczeniu

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16
Q

expenditures (znaczenie)

A

nakłady

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17
Q

expenditures:

A

expense
asset
-ordinary (zwykła) repairs
* expenditures to maintain (utrzymanie) the operating efficiency and productive life of the unit.
* debit to [Maintenance and Repairs] Expense
- Additions and Improvements
* costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset.
* debit the [plant] asset account
* referred to as capital expenditures

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18
Q

amortization expense (znaczenie)

A

amortyzacja wnip

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19
Q

What is depreciation?

A

Depreciation is the accounting process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
It applies to all plant assets except for land.

20
Q

Allocating costs of long-lived assets:

A
  • Fixed assets = Depreciation expense
  • Intangibles = Amortization expense
  • Mineral resources = Depletion expense
21
Q

Three important factors of depreciation:

A

COST - All expenditures necessary to acquire the asset and make it ready for its intended use
Useful life - Estimate of the expected life based on need for repair, service life, and vulnerability to obsolescence (podatność na starzenie się)
Residual value - Estimate (oszacować) of the asset’s value at the end of its useful life

22
Q

Depreciation methods:

A

Management selects the method it believes best
measures an asset’s contribution to revenue over its
useful life. Examples include:
1) Straight-line method
2) Units-of-activity method
3) Declining-balance method

23
Q

Straight-line method:

A
  • Expense is same amount for each year
  • Depreciable base = Cost less residual value
24
Q

Units-of-Activity Method:

A
  • Companies estimate total units of activity to calculate depreciation cost per unit
  • Expense varies based on units of activity
  • Depreciable cost is cost less salvage value
  • Often referred (odniesione) to as units-of-production method
25
Q

Declining- Balance Method

A
  • Accelerated (przyspieszona) method
  • Decreasing annual depreciation expense over asset’s useful life
  • Double declining- balance rate is double the straight-line rate
  • Rate applied to book value
26
Q

Depreciation and income taxes:

A
  • Tax laws do not require taxpayer to use the same depreciation method on the tax return that is used in preparing financial statements
  • Many companies use straight-line in their financial statements to maximize net income.
  • They also use an accelerated depreciation method on their tax returns to minimize their income taxes.
27
Q

Disposals (znaczenie)

A

zbycie

28
Q

Companies dispose of plant assets in three ways:

A
  • Retirement (wycofanie): Equipment is scrapped (złomowany) or discarded (wyrzucany)
  • Sale: Equipment is sold to another party
  • Exchange: Equipment is traded for new equipment
29
Q

How record depreciation?

A

Record depreciation up to the date of disposal.

30
Q

Eliminate asset by:

A

(1) debiting Accumulated Depreciation,
and (2) crediting the asset account.

31
Q

Retirement (znaczenie)

A

wycofanie z użytku

32
Q

Retirement:

A
  • no cash is received
  • Decrease (debit) Accumulated Depreciation for full amount of depreciation taken over life of asset
  • Decrease (credit) asset account for original cost of asset
33
Q

Sale:

A
  • Compare the book value of the asset with the proceeds received from the sale.
  • If proceeds exceed the book value, a gain on disposal occurs; if proceeds are less than the book value, a loss on disposal occurs (Jeżeli wpływy przekraczają wartość księgową, następuje zysk ze zbycia; jeśli wpływy są niższe niż wartość księgowa, następuje strata ze zbycia)
34
Q

Natural resources:

A
  • Natural resources consist of standing timber (drewno) and underground deposits of oil, gas, and minerals
  • Distinguishing characteristics:
  • Physically extracted in operations
  • Replaceable only by an act of nature
  • Cost is the price needed to acquire the resource and
    prepare it for its intended use.
35
Q

Depletion:

A
  • The allocation of the cost to expense in a rational and systematic manner over the resource’s useful life.
  • Companies generally use units-of-activity method
  • Depletion generally is a function of the units extracted
    Total cost - residual value/ total estimated units available = depletion cost per unit
36
Q

Intangible assets (niematerialne aktywa):

A
  • Identifiable; lack physical existence; not monetary assets
  • Rights, privileges, and competitive advantages
  • Normally classified as non-current asset
  • Limited life or indefinite life
  • Patents
  • Copyrights
  • Franchises and licenses
  • trademarks
  • trade names
    -goodwill
37
Q

Limited-life intangibles:

A
  • amortize to expense
  • credut asset account or accumulated amortization
38
Q

Indefinite-life Intangibles:

A
  • no foreseeable (do przewidzenia) limit on time asset is expected to provide cash flow
  • no amortization
39
Q

Intangible assets: patents

A
  • Exclusive right to manufacture, sell, or otherwise control an invention for 20 years from date of grant (limited life)
  • Capitalize costs of purchasing a patent and amortize over 20-year life or its useful life, whichever is shorter
  • Expense any R&D costs in developing a patent
  • Legal fees incurred successfully defending a patent are capitalized to Patents account
40
Q

Intangible assets: copyrights

A

-Gives owner exclusive right to reproduce and sell an artistic or published work
- granted for life of creator plus 70 years
- capitalize cost of acquiring and defending

41
Q

Intangibel assets: Trademarks and trade names

A
  • Word, phrase, jingle, or symbol that distinguishes or identifies a particular enterprise or product
  • Legal protection for indefinite number of 20-year renewal periods
  • Capitalize acquisition costs. No amortization
42
Q

Intangible assets: Franchises

A
  • Contractual arrangement between a franchisor and a franchisee
  • For example: CPC, Subway, and Europcar are franchises
  • Franchise (or license) with a limited life should be amortized to expense over its useful life
  • If life is indefinite, cost is not amortized
43
Q

Intangible assets: goodwill (wartość firmy)

A
  • Includes exceptional management, desirable location, good customer realtions, skilled employees, high-quality products, etc.
  • only recorded when an entire business is purchased
  • goodwill is recorded as excess of purchase price over fair value of net assets acquired
44
Q

Research and development (R&D) cost are

A

not in themselves intangible assets.

45
Q

Research activities:

A

original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding

46
Q

Development activities:

A

Application of research findings or other knowledge to a plan or design to produce new or substantially improved materials, devices, products, processes, systems, or services before the start of commercial production or use.

47
Q

Research and Development Costs:
Expense vs. Capitalize

A
  • research costs must be expansed as incurred
  • development costs may or may not be expensed as incurred
  • capitalization begins when the project is far enough along in the process such that the economic benefits of the R&D project will flow to the company (the project is economically viable)

Egzaminy (19 decks)

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