PPE

Question 1

Define Carrying Amount

Answer 1

Is the amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses.

Question 2

Define ‘Cost’

Answer 2

Is the amount of cash (1) or cash equivalents (2) paid or the fair value (3) of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other IFRS.

Question 3

Define Depreciable amount

Answer 3

Is the cost of an asset, or other amount substituted for cost, less its residual value.

Question 4

Define Depreciation

Answer 4

The systematic allocation of the depreciable amount of an asset over its useful life.

Question 5

Define Entity-specific Value

Answer 5

Is the present value of the cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability.

Question 6

Define Fair value

Answer 6

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.

Question 7

Define an impairment loss

Answer 7

Is the amount by which the carrying amount of an asset exceeds its recoverable amount.

Question 8

Define Property, Plant and Equipment

Answer 8

Are tangible items that:
a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

b) are expected to be used during more than one period.

Question 9

Define Recoverable amount

Answer 9

Is the higher of an asset’s fair value less costs of disposal and its value in use.

Question 10

Define Residual value of and Asset

Answer 10

The estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in condition expected at the end of its useful life.

Question 11

Define Useful Life

Answer 11

a) The period over which an asset is expected to be available for use by an entity; or

b) the number of production or similar units expected to be obtained from the asset by any entity.