PPE

Question 1

What are the two replacement values?

Answer 1

Net replacement value and Gross replacement value.

Question 2

What are the two replacement methods?

Answer 2

Elimination restatement method (NRV)
Proportionate restatement method (GRV)

Question 3

NRV is equal to?

Answer 3

GRV less Accumulated depreciation.

Question 4

What is GRV?

Answer 4

Cost to replace my PPE-item with a NEW PPE item

Question 5

What is NRV?

Answer 5

Cost to replace my PPE item with a PPE item
that is AS OLD AS THE ONE I ALREADY HAVE

Question 6

How is depreciation treated in GRV?

Answer 6

Accumulated depreciation is proportionately restated

Question 7

How is depreciation treated in NRV?

Answer 7

Accumulated depreciation is eliminated against the cost of the asset

Question 8

Formula to convert NRV to GRV.

Answer 8

NRV = GRV - Accumulated depreciation
𝑁𝑅𝑉=[[ 𝑟𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒 /𝑇𝑜𝑡𝑎𝑙 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒] 𝑥 𝐺𝑅𝑉 −𝑅𝑉]+RV

Question 9

Formula to convert GRV to NRV.

Answer 9

𝐺𝑅𝑉=[[ 𝑡𝑜𝑡𝑎𝑙 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒 /𝑅𝑒𝑚𝑎𝑖𝑛𝑖𝑛𝑔 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒] 𝑥 𝑁𝑅𝑉 −𝑅𝑉]+𝑅𝑉