Other Flashcards
Where does AASB 116 require asset revaluation losses to be recognised in
Profit and Loss
Where does AASB 116 require asset revaluation gains to be recognised
Other Comprehensive Income (OCI)
What is the title for AASB 116
Property Plant and Equipment
How is Profit and Loss described according to AASB 101
Profit or loss is the total of income less expenses, excluding the items of other comprehensive income
AASB 101 para 97 requires the seperate disclosure of
the nature and amount of material items in income and expense
The statement of profit and loss and other comprehensive income must be presented as either
a single statement presented in 2 sections or 2 seperate statements (both p&l followed by OCI)
AASB 116 para 7 PPE recognised as a asset if
it is probable that future economic benefits associated with the item will flow to the entity, and the cost of the item can be measured reliably
AASB 116 para 15 the initial measurement is
the cost of the asset (purchase price and directly attributable costs)
AASB 116 para 62 states 3 methods of depreciation
Straight line method, diminishing balance method, units of production method
journal entry for depreciation
dr depreciation expense, cr accumulated depreciation
AASB 13 fair value measurement states
The price that would be received between market participants at the measurement date
AASB 116 para 31 revaluation model
applies to PPE whose fair value can be measured reliably shall be carried at a revalued amount
journal entry for asset revaluation (increase)
dr asset, cr gain on revaluation (oci), (end of f/y) dr gain on revaluation (oci), cr asset revaluation surplus (equity)
journal entry for asset revaluation (decrease)
write off accumulated depreciation dr accumulated depreciation, cr asset, then write down asset dr downward revaluation of asset, cr asset
What 2 phases must an entity classify internally generated intangible assets into?
Research phase and development phase
When can an R&D project be recognised as an intangible asset?
When it enters the development stage - but only if an entity can distinguish between research and development and satisfies all 6 recognition criteria under AASB 138 para 57
Under AASB 138, when can goodwill be recognised as an intangible asset?
Only when goodwill has been acquired, internally generated goodwill cannot be recognised
What is the title for AASB 138
Intangible assets
What is the title for AASB 137
Provisions, contingent liabilities and contingent assets
AASB 137 defines a contingent liability as
a possible obligation that arises from past events OR a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the liability cannot be measured reliably
Contingent liabilities are not recognised in the financial statements because
they either do not meet the definition of a liability or do not meet the recognition criteria
When should a provision be recognised under AASB 137
an entity has a present obligation as a result of a pst event, it is probable that an outflow of economic resources will be required to settle the obligation, and a reliable estimate can be made
What are the 3 valuation techniques for measuring fair value?
market approach (direct observation of identical asset), income approach (convert future amounts to a single current discounted rate) and cost approach (current replacement cost)
What is the title of AASB 102
Inventories
What is the definition of inventories under AASB 102
Inventories are assets:
(a) held for sale in the ordinary course of business;
(b) in the process of production for such sale; or
(c) in the form of materials or supplies to be consumed in the production process or in the rendering of services.
Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Fair value is
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
