PP & E Flashcards

1
Q

How do you calculate the depreciation rate under composite (group)depreciation?

A

Sum of annual SL depreciation of individual assets divided by the total asset cost

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2
Q

How do you calculate the life of a group of assets under composite (group) depreciation?

A

Depreciable base divided by the sum of annual SL depreciation of individual assets.

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3
Q

How do you calculate the decrease in accumulated depreciation when disposing of a component in a group of assets depreciated under composite (group) depreciation?

A

DR: Cash (Proceeds received)
DR: Accumulated Depreciation (plug)
CR: Asset (Original cost)
Original cost minus Cash.

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4
Q

If an intangible assets life can be extended indefinitely how should its cost be amortized?

A

Its cost is not amortized because it has no determinable useful life.

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5
Q

For computer software costs what are the stages and how are costs treated?

A

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.

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6
Q

What are the things that must be remembered about development stage enterprises?

A

Same overall reporting, with cumulative amounts on both IS and BS and extra footnotes.

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7
Q

Under IFRS what kind of assets have to be tested for impairment each year?

A

Intangibles with no definite life.

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8
Q

In a nonmonetary exchange, with no commercial substance and where boot is involved, how do you calculate gain recognized?

A

Divide the boot by the boot plus the fair value of the asset given up then multiply by the total gain.

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