Chapter 6 - Tangible Non-current Assets Flashcards Preview

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Flashcards in Chapter 6 - Tangible Non-current Assets Deck (7)
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1
Q

What does IAS 16 cover?

A

Property, Plant & Equipment

Covers any tangible assets that are:

  • Held for use
  • Expected to be used for more than one period
2
Q

How should all assets be measured by initially?

A

At cost

Cost is the purchase price plus all directly attributable costs

3
Q

Examples of directly attributable costs

A

Salaries for constructing the asset

Cost of site prep

Delivery

Installation and assembly

Testing the asset

Professional fees

Non refundable taxes

4
Q

Things that should not be included in the cost of an asset

A

Costs of opening the facility

Admin costs

Advertising

Operating losses

Training

5
Q

What are the two types of cost for subsequent expenditure?

A

Expenses - repairs, redecoration, maintenance etc should be added to P&L

Enhancement - upgrading a machine etc should be added to the cost of the asset

6
Q

What are the two types of measurement post acquisition?

A

Cost model - Asset is carried at cost less depreciation

Revaluation model - Asset is carried at fair value less any subsequent accumulated depreciation

7
Q

Formula if the rate of depreciation or the useful life is changed?

A

NBV - Residual Value / Remaining useful life