Non-current Assets (Week 6)

Question 1

What is Going Concern?

Answer 1

The company will continue to operate for the foreseeable future. No intention for the company to go through liquidation

Question 2

Historical Cost Measurement basis

Answer 2

Reflects the original transaction price, adjusted for asset use, impairment, or liability fulfillment over time

Question 3

Current Value Measurement basis

Answer 3

Reflects updated conditions, including fair value, value in use, fulfillment value, and current cost

Question 4

What is Fair Value?

Answer 4

The expected price to sell an asset or settle a liability at the measurement date.

Question 5

What is Current/ Replacement Cost?

Answer 5

Reflects the current amount that would be:

–> Paid to acquire an equivalent asset.

–> Received to take on an equivalent liability

Question 6

What is Present Value?

Answer 6

The current value of a single future cash flow or series of cash flows, discounted at a specific rate

Question 7

What is a Non-current Asset (NCA)?

Answer 7

–> A resource owned by the company longer than one year

–> Held for use to help generate profit

–> Not for sale

Question 8

Examples of NCA:

Answer 8

–> Investments
–> Property
–> Plants
–> Equipment

Question 9

What is a Current Asset (CA)?

Answer 9

Resources that the company expects to sell or consume within the financial year

Question 10

Examples of CA:

Answer 10

–> Inventory
–> Trade Receivables
–> Bank (cash equivalents)
–> Cash
–> Prepaid expenses
–> Accrued revenue