PPE Flashcards
Acquisition of Assets
Dr Asset xxx
Cr. Cost / a/c payable xxx
Depreciation amount
(HC - RV) / UL
Disposal of Assets - Sale
Dr Dep Exp
Cr. ACC Dep
Dr Cash
Dr loss on disposal
Dr ACC dep
Cr Asset
Cr. Gain on disposal
Disposal of Assets - Exchange
Dr Dep exp
Cr. ACC dep
Dr new asset
Dr loss on exchange
Dr.acc dep
Cr. Old asset
Cr. Gain on exchange
Disposal of Assets - destruction
Dr Dep Exp
Cr. ACC Dep
Dr Cash
Dr loss on asset
Dr ACC dep
Cr Asset
Disposal of Assets - Donation
Dr Dep Exp
Cr. ACC Dep
Dr donation exp
Dr ACC dep
Cr Asset
Cr. Gain on disposal
Revaluation steps:
1) calculate depreciation
2) eliminate depreciation
3) perform revaluation
Revaluation - Land
Dr. Land
Cr. Rev surplus
Hc - FV
Revaluation - Asset (journal)
Dr. Dep exp
Cr acc dep
Dr. ACC dep
Cr. Asset
Dr. Asset
Cr. Revaluation Surplus
Revaluation asset - (equation)
Accumulate
Revaluation Decrement
Dr Acc Dep
Cr Asset
Dr. Loss on Revaluation
Cr Asset
Reversal of Revaluation - Increment to Decrement
Dr. Rev Surplus
Dr. Loss on Revaluation
Cr. Asset
Reversal of Revaluatoin - Decrement to Increament
Dr. Asset
Cr. Gain on Revaluation
Cr. Revaluation Surplus
Disposal of Revalued Land
Dr. Land
Cr Rev surplus
Dr. Cash
Cr. Land
Cr. Gain on Sale
Dr Rev Surplus
Cr. Retained Earnings
(Unrealized gains becoming a realized gains when sold)
Impairment definition
A nca that is worth less than before because the company is not able to recover the ca. the decrease in value is the impairment loss.
Impairment equation
HC
(Acc Dep)
(Acc Imp)
————-
CA
Impairment Loss - Journal entry
Dr Impairment Loss
Cr Accumulated Impairment loss
Impairment
CA < RA
Year 1:
No impairment
Year 2:
Recovery/reversal of impairment for second year
Impairment
CA > RA
Impairment loss
Take the higher of fair value less cost to sell or value in use
