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All of the following factors need to be considered in determining the useful life of an asset, except
Expected usage of asset
Expected physical wear and tear
For items within a class of property, plant and equipment with insignificant changes in fair value, revaluations are necessary only every
Three to five years
Five to ten years
The production method of depreciation results in
Constant charge over the life of the asset
Decreasing charge over the life of the asset
Increasing charge over the life of the asset.
Variable charge based on the expected use or output of the asset.
For purposes of revaluation, if there is no market-based evidence of fair value because of the specialized nature of the item of property, plant and equipment and the item is rarely sold, the estimate of fair value is equal to
Depreciated replacement cost
Historical cost restated in terms of the current price level
If an asset’s carrying amount is decreased as a result of revaluation, the decrease shall be
Recognized in profit or loss after deducting any revaluation surplus previously recognized
Debited directly to revaluation loss as component of other comprehensive income
Debited directly to equity under the heading unrealized loss.
What is the allocation of an impairment loss recognized for a cash generating unit?
Across the assets of the unit based on carrying amount.
Across the assets of the unit based on fair value.
First, to any goodwill, and the balance to the other assets on a prorata basis based fair value.
First, to any goodwill, and the balance to the other assets on a prorata basis based on carrying amount.
The recoverable amount of an asset or cash generating unit is the
Fair value less cost to sell
Value in use
Higher between fair value less cost to sell and value in use
Lower between fair value less cost to sell and value in use
Which of the following depreciation methods is not an accelerated method?
Double declining balance
150% declining balance
Which of the following terms best describes the cost (or an amount substituted for cost) of an asset less its residual value?
An asset has a nine-year useful life and is to be depreciated under the sum-of-the-years’ digits method. The annual depreciation expense would be the same as that under the straight line depreciation method in
the third year in the life of the asset
the fifth year of the life of the asset
the seventh year of the life of the asset
the ninth year of the life of the asset