Tangible Non-Current Assets

Question 1

Is a change of depreciation method a change of accounting policy or a change in accounting estimate?

Answer 1

A change in accounting estimate

Question 2

If an item of property, plant and equipment is valued using the revaluation model, do all the assets in the category have to be revalued?

Answer 2

Yes

Question 3

If an annual reserves transfer is made in respect of a revaluation surplus from revaluation surplus to retained earnings, which depreciation is allowable to be transferred?

Answer 3

The ADDITIONAL depreciation charged on the revalued amount compared to cost

Question 4

If you are disposing of a revalued non-current asset, do you need to take into account the revaluation surplus relating to this asset?

Answer 4

Yes, this should now be transferred to retained earnings

Question 5

What is the formula to work out the average cost of general borrowings taken for capitalising interest on an asset?

Answer 5

(Loan amount x interest rate) + (Loan amount x interest rate)/Overall loan amount borrowed

Question 6

When is a property classed as an investment property?

Answer 6

When it is held to either earn rentals or for capital appreciation or both

Question 7

If an investment property is held under the fair value model, how often must it be revalued?

Answer 7

Every year

Question 8

If an investment property is held under the fair value model, is depreciation charged?

Answer 8

No

Question 9

If there is a gain or loss on the revaluation of a property held under the fair value model, is this posted directly to the profit or loss or shown in other comprehensive income?

Answer 9

Posted directly to the profit or loss