IAS 16 PROPERTY, PLANT AND EQUIPMENT

PPE are tangible assets that:

• held by entities for use in the production of supply of goods and services

• rental to others

• admin purpose

• normally within one year

All PPE initially must be recorded at

• Fair value

• Cost price

• Net realisable value

• Replacement cost

Based on IAS 16 PPE, all PPE subsequently can be measured using

• Cost Model

• Fair value model

• Revaluation model

• Recoverable amount model

The following cost may be included in initial measurement at cost price...

• Staff training

• Initial operating losses

• import duties

• present value of future refurbishment cost

• feasibility study cost

Day to day servicing cost must be recognised as expenses in the period it is incurred.

• False

• True

Building acquired at 1/1/2010 with EUEL 50 years at $20m. Assume nil SV. SLM. At 1/1/ 2016 revalued to $18.4m. Calculate the amount of revaluation surplus at 1/1/2016.

• $0.42m

• $1.6m

• $8m

• $800,000

Building acquired at 1/1/2015 with EUEL 80 years at $100m. Assume nil SV. SLM. At 1/1/ 2019 revalued to $98m. Calculate the amount of revaluation surplus at 1/1/2019.

• $3m

• $2m

• $5m

• $10m

Building acquired at 1/1/2010 with EUEL 50 years at $20m. Assume nil SV. SLM. At 1/1/ 2016 revalued to $18.4m. Calculate the amount of depreciation for year ended 31/12/2016.

• $0.4m

• $0.24m

• $0.22m

• $0.42m

Motor vehicle with cost price $80,000 and had been used for 4 years disposed for $ 15,000. SLM at 20%. Calculate the profit or loss on disposal.

• Loss $1,000

• Profit $1,000

• Profit $ 65,000

• Loss $16,000

What is the correct double entry for EDA?

• DR Retained Earnings CR Revaluation Reserve

• DR P/L CR Revaluation Reserve

• DR Revaluation Reserve CR Retained Earnings

• DR Revaluation Reserve CR P/L