PP & E Flashcards
How do you calculate the depreciation rate under composite (group)depreciation?
Sum of annual SL depreciation of individual assets divided by the total asset cost
How do you calculate the life of a group of assets under composite (group) depreciation?
Depreciable base divided by the sum of annual SL depreciation of individual assets.
How do you calculate the decrease in accumulated depreciation when disposing of a component in a group of assets depreciated under composite (group) depreciation?
DR: Cash (Proceeds received)
DR: Accumulated Depreciation (plug)
CR: Asset (Original cost)
Original cost minus Cash.
If an intangible assets life can be extended indefinitely how should its cost be amortized?
Its cost is not amortized because it has no determinable useful life.
For computer software costs what are the stages and how are costs treated?
Before tech feasibility - Expense as incurred (R&D)
After technological feasibility, before marketability - Capitalize and amortize at greater of straight line or current revenue over expected revenue times cost.
After marketability - Expense as incurred in COGS.
What are the things that must be remembered about development stage enterprises?
Same overall reporting, with cumulative amounts on both IS and BS and extra footnotes.
Under IFRS what kind of assets have to be tested for impairment each year?
Intangibles with no definite life.
In a nonmonetary exchange, with no commercial substance and where boot is involved, how do you calculate gain recognized?
Divide the boot by the boot plus the fair value of the asset given up then multiply by the total gain.