Quiz IAS 16

A COMPANY PURCHASES LAND WITH AN OFFICE BUILDING. THE BUILDING HAS A USEFUL LIFE. HOW SHOULD THE LAND BE DEPRECIATED

• Depreciate over 20 years

• Don’t depreciate the land

• Depreciate over useful life of the land

• None of these

IF AN ASSET DECREASES IN VALUE, THE DECREASE IS NOTED AS...

• An expense in the SOCI

• A decrease in the “revaluation surplus” in the SOFP

• A decrease in retained earnings in the SOFP

• As “valuation decit” in the SOFP

WHICH OF THESE IS AN ALLOWABLE COST OF AN ASSET UNDER IAS 16?

• Professional fees

• General overheads

• Initial operating losses

• Administration expenses

AN INTANGIBLE ASSET WITH A FINITE USEFUL LIFE SHOULD BE AMORTISED OVER...

• Its expected useful life

• A period determined by management

• Five years

• No foreseeable limit

A COMPANY MAY INTERNALLY GENERATE AN INTANGIBLE ASSET.

• True

• False

INTANGIBLE ASSETS WITH AN INDEFINITE USEFUL LIFE SHOULD NOT BE AMORTISED.

• True

• False

WHEN DOES AMORTISATION OF AN INTANGIBLE ASSET COMMENCE?

• When the asset is substantially complete

• When the asset is available for use

• When management determine

• At the start of the accounting period

WHICH OF THE FOLLOWING INTERNALLY GENERATED ITEMS MAY NOT BE RECOGNISED AS INTANGIBLE ASSETS?

• Mastheads

• Customer lists

• Brands

• All of these

WHICH OF THE FOLLOWING IS AN INTANGIBLE ASSET UNDER IAS 38?

• Patent rights

• Market share

• Customer loyalty

• Technical knowledge training

WHICH TWO SUBSEQUENT ACCOUNTING TREATMENTS ARE ALLOWED SUBSEQUENTLY TO INITIAL RECOGNITION?

• Cost model and present value model

• Cost model and revaluation model

• Fair value model and revaluation model

• Fair value model and cost model