Non-current assets Flashcards
Define assets
Resources controlled by an entity as a result of past events and from which future economic benefits are expected to flow
How to treat PPE (or other NCA’s) replacement costs
Capitalise when the occur and treat depreciation separately to that of the original asset
How to treat PPE (or other NCA’s) servicing costs (day-to-day maintenance and repairs)
Charge to the P and L when they are incurred as revenue expenses
Treatment of land
Land it not depreciated as it is thought to have an infinite useful life
Define revalued amount of PPE
The fair value at the date of revaluation less subsequent accumulated deprecation and impairment losses
Revaluation model deprecation
depreciation is charged on the revalued amount, continuing to be recorded to the P&L as an expense in the usual way
Revaluation model one item
Where one item of PPE is revalued, all items in the same class should also be revalued
Revaluation model surplus
Surplus arising on revolution should be credited to the SOFP revaluation reserves
Revaluation model excess depreciation
anything now charged over the initial amount can be transferred from the revaluation reserve to retained earnings each year
Revaluation model disposal
the remaining balance in the revaluation surplus should be transferred to retained earnings to realise the gain
Revaluation model sufficient regularity
revaluations should be made regular to ensure the carrying about does not materially differ from its fair value.
Define goodwill
The difference between what is paid for an entity and the fair value of that entity
Define purchased goodwill
When an entity acquires shares or assets of another entity
Define research costs
Costs incurred to gain new scientific knowledge and understanding
Treatment of research costs
Expensed to the P and L when they occur
