Nas 16: Property, Plant And Equipment

Question 1

What does IAS 16 stand for?

Answer 1

International Accounting Standard 16

Question 2

What is the primary focus of IAS 16?

Answer 2

The accounting treatment for property, plant, and equipment (PPE).

Question 3

True or False: IAS 16 applies to all types of assets.

Answer 3

False

Question 4

Fill in the blank: IAS 16 outlines the recognition of _____ for property, plant, and equipment.

Answer 4

cost

Question 5

What are the two measurement models allowed under IAS 16?

Answer 5

Cost model and revaluation model.

Question 6

Short answer: What is the cost model in IAS 16?

Answer 6

The cost model states that an asset should be carried at its cost less any accumulated depreciation and impairment losses.

Question 7

Short answer: What is the revaluation model in IAS 16?

Answer 7

The revaluation model allows an asset to be carried at its fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses.

Question 8

What is included in the cost of an asset according to IAS 16?

Answer 8

Purchase price, directly attributable costs, and any dismantling or restoration costs.

Question 9

True or False: IAS 16 requires that all property, plant, and equipment be depreciated.

Answer 9

True

Question 10

What is depreciation according to IAS 16?

Answer 10

The systematic allocation of the depreciable amount of an asset over its useful life.

Question 11

Fill in the blank: The useful life of an asset is defined as the period over which an asset is expected to be _____ by the entity.

Answer 11

available for use

Question 12

What is the residual value of an asset?

Answer 12

The estimated amount that an entity would currently obtain from the asset’s disposal after deducting the estimated costs of disposal.

Question 13

Multiple choice: Which of the following is NOT a factor in determining depreciation?

Answer 13

Market value of the asset

Question 14

Short answer: What is impairment in the context of IAS 16?

Answer 14

Impairment occurs when the carrying amount of an asset exceeds its recoverable amount.

Question 15

True or False: An entity can choose not to apply IAS 16 if it doesn’t own any property, plant, and equipment.

Answer 15

True

Question 16

What is the purpose of revaluation according to IAS 16?

Answer 16

To ensure the asset is carried at its fair value, reflecting its current market conditions.

Question 17

Fill in the blank: Under IAS 16, an entity must disclose the _____ of its property, plant, and equipment.

Answer 17

accounting policies

Question 18

What is the journal entry for recording the acquisition of an asset under IAS 16?

Answer 18

Debit Asset account, Credit Cash/Bank or Payables.

Question 19

Multiple choice: Which of the following is considered an operating expense under IAS 16?

Answer 19

Repair and maintenance costs

Question 20

Short answer: When should an entity assess whether an asset is impaired?

Answer 20

At each reporting date.

Question 21

True or False: IAS 16 allows for the reversal of impairment losses.

Answer 21

True

Question 22

What is the impact of revaluation surplus on equity according to IAS 16?

Answer 22

It increases the revaluation surplus in the equity section of the balance sheet.

Question 23

Fill in the blank: The carrying amount of an asset is the amount at which an asset is recognized in the _____.

Answer 23

balance sheet

Question 24

Short answer: What should an entity do when it disposes of an asset according to IAS 16?

Answer 24

Remove the asset’s carrying amount and any related accumulated depreciation from the books.

Question 25

Multiple choice: Which of the following is NOT a requirement for an asset to be recognized under IAS 16?

Answer 25

The asset must be a financial instrument.