PPE Flashcards
What do you include in PPE initial measurement?
- purchase price
- improvement costs
- commissioning and testing (LESS proceeds from by products)
- dismantling costs at present value
What do you exclude form PPE initial measurement (charge though P&L)?
- non incremental costs
- costs incurred after asset ready for use
- repair/maintenance
- abnormal costs
- incidental income
What do you include in PPE under construction?
- labour cost
- material costs
- directly attributable BORROWING COSTS
When do you start depreciating?
When asset is available for intended use
When do you stop depreciating?
When asset is held for sale
What is the reserve transfer?
The increase in depreciation due to a revaluation
DR revaluation reserve
CR retained earnings
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What is the criteria for intangible assets?
- identifiable = separable or contractual right
- controlled by entity
- future economic benefits probable
- reliable measurement
What do you capitalise if intangible is separately acquired?
Cost and directly attributable costs
What do you capitalise if the intangible is internally generated?
- research must be charged to the P&L
- development =criteria in IAS 38 para 57
What do you capitalise of an intangible if due to a business combination?
Capitalise at FAIR VALUE, only in the group accounts
When may you revalue intangibles?
When there is an active market
What are the indicators for an active market?
- Items are homogeneous
- Buyers and sellers can be found at any time
- Prices available to the public
For impairments what do you compare carrying amount to?
Higher of:
- Value in use (pv or future cash flow)
- FV less costs to sell
If an asset is impaired when being valued for held for sale purposes, what are the entries?
Dr expense (NEVER reval surplus) Cr asset
