PPE and IFRS

Question 1

Where is revaluation surplus reported under International Financial Reporting Standards (IFRS) until the Property, Plant, and Equipment (PPE) is sold?

Answer 1

It is reported in Equity.

Question 2

Under International Financial Reporting Standards (IFRS) how is interest during construction accounted for?

Answer 2

Expensed or capitalized

Interest earned can offset the interest costs on construction loans

Question 3

Under International Financial Reporting Standards (IFRS), what two methods can be used to adjust accumulated depreciation?

Answer 3

The proportional and reset methods

Question 4

Under International Financial Reporting Standards (IFRS), is revaluation of Property, Plant, and Equipment (PPE) allowed?

Answer 4

Yes, revaluation is allowed

Question 5

What happens during the reset method of adjusting A/D for IFRS?

Answer 5

Accumulated depreciation is reset to zero by closing it to the building account, and then the building is adjusted for the revaluation