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- Multiple ChoicePlease save your changes before editing any questions.
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
Technical obsolescence
Residual value
- Multiple ChoicePlease save your changes before editing any questions.
For items within a class of property, plant and equipment with insignificant changes in fair value, revaluations are necessary only every
Five years
Ten years
Three to five years
Five to ten years
- Multiple ChoicePlease save your changes before editing any questions.
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.
- Multiple ChoicePlease save your changes before editing any questions.
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
Replacement cost
Depreciated replacement cost
Current cost
Historical cost restated in terms of the current price level
- Multiple ChoicePlease save your changes before editing any questions.
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
Retained earnings
Debited directly to equity under the heading unrealized loss.
- Multiple ChoicePlease save your changes before editing any questions.
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.
- Multiple ChoicePlease save your changes before editing any questions.
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
- Multiple ChoicePlease save your changes before editing any questions.
Which of the following depreciation methods is not an accelerated method?
Double declining balance
Straight line
Sum-of-the-years’ digits
150% declining balance
- Multiple ChoicePlease save your changes before editing any questions.
Which of the following terms best describes the cost (or an amount substituted for cost) of an asset less its residual value?
Revalued amount
Carrying amount
Recoverable amount
Depreciable amount
- Multiple ChoicePlease save your changes before editing any questions.
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