Property Plant and Equipment

Which Accounting Standard talks about Property, Plant and Equipment?

• IAS 2

• IAS 7

• IAS 40

• IAS 16

When can a tangible item be recognized as PPE?

• It meets the definition of an asset.

• Provides users of financial statements with information that is useful.

• Its recognition ensures comparability.

• Both A and B.

___ is the systematic allocation of the depreciable amount of an asset over its useful life.

What is meant by depreciable amount?

• Cost of an asset over its residual value

• Cost of an asset less its residual value.

• The estimated amount an entity would currently obtain from the disposal of the asset after deducting the estimated costs of disposal.

• None of the above

Which of the following depreciation methods assumes the consumption of future economic benefits is the same from year to year?

• Straight-line method

• Reducing balance method

• Unit of production method.

Which of the following is not true about the unit of production method?

• Residual value of the asset is considered insignificant.

• Depreciation is based on the asset usage and not the passage of time

• Depreciation is a direct measurement of the use of the asset.

The reducing balance method is usually chosen where the consumption of the future economic benefits declines from year to year.

• True

• False

In which of the following cases will an asset's residual value be R0?

• We expect to use the asset for longer than 5 years

• The amount is considered to be insignificant

• When the CEO feels it is the right decision.

• It will make our depreciation calculation less complicated.

Which of the following may not be considered a non-current asset?

• Vehicles

• Machinery

• Linen

• Office building.

IAS 16 requires that PPE is measured at...

• Lower of cost and NRV

• Cost Model

• Revaluation Model

• B or C