EBA2013 - LU1 (PPE)

The following statement refers to Paragraph 6 of MFRS 116, which states that PPE is tangible assets, EXCEPT

• PPE held for the use of production or supply of goods or services

• PPE use for rental

• PPE use for administrative purposes

• PPE only use for one period

MFRS 16 listed the following assets under the standard of PPE, EXCEPT

• Biological assets

• Agriculture assets

• Natural gas

• Grass

Which of the following statement is TRUE about the usefulness of qualitative characteristic of PPE?

• The information is relevant if it enables users to make decisions

• The information is relevant if it enables preparers to make decisions

• Information is material if its omission not misleads users to make decisions

• Information not presents a depiction of that it purports to indicate to users

MFRS 116 outlines the criteria that need to be present to recognise PPE: (i) the entity expects to obtain an economic benefit; (ii) the cost can be reliably measured.

• True

• False

A self-constructed asset is built by an entity for its own use and recognised based on cost and related expenditure (e.g., a material used, labour and contractor costs).

• True

• False

In capitalising on interest, the entity must ensure that it does not exceed the actual interest.

• True

• False

MFRS 116 allows certain methods for treating the revaluation model for PPE. Which of the following statements is correct?

• Cost basis

• Proportion basis

• Revalue basis

• Devalue basis

Under Revaluation Model, when a PPE is revalued downwards, the loss shall be recorded as a loss in other comprehensive income, and it reduces accumulated equity in the revaluation surplus.

• True

• False

The asset is derecognized if it is disposed of or economic benefits cease to flow from the asset.

• True

• False

When a PPE is derecognised, the revaluation surplus for the PPE is transferred _________?

• Returned Earnings

• Current Assets

• Expenses

• Cash and Bank