Depreciation Of Property, Plant And Equipment

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An Overview of the International External Reporting Environment
The Conceptual Framework of Accounting and Its Relevance to Financial Reporting
Theories of Financial Accounting
An Overview of Accounting for Assets
Depreciation of Property, Plant and Equipment
Revaluations and Impairment Testing of Non-Current Assets
Inventory
Accounting for Intangibles
An Overview of Accounting for Liabilities
Accounting for Leases
Share Capital, Reserves and Share Options Employee Bonus Schemes
Accounting for Financial Instruments
Revenue Recognition Issues
The Statement of Comprehensive Income and Statement of Changes in Equity
Accounting for Income Taxes
The Statement of Cash Flows
Events Occurring After the Reporting Date
Related-Party Disclosures
Earnings Per Share
Further Consolidation Issues I: Accounting for Intragroup Transactions
Further Consolidation Issues II: Accounting for Non-Controlling Interests
Further Consolidation Issues III: Accounting for Indirect Ownership Interest
Accounting for Foreign Currency Transactions
Translating the Financial Statements of Foreign Operations
Accounting for Corporate Social Responsibility

All Questions

Question 1

Free

True/False

Depreciation represents a decline in the market value of an asset over its life.

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Question 2

Free

True/False

Where a non-current asset appreciates in value over time,no depreciation should be charged.

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False

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Question 3

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True/False

The useful life of the asset reflects the time from when an asset is built/acquired until it is no longer able to produce any benefits.

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Question 4

Free

True/False

The depreciable amount is the historical cost of the non-current asset,or revalued amount substituted for historical cost in the financial report,less the net amount expected to be recovered on disposal of the asset at the end of its useful life.

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Question 5

Free

True/False

The depreciation rate and useful lives of assets should not be revised during the depreciable life of the asset.

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Question 6

True/False

Assets must be depreciated from the time they are acquired.

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Question 7

True/False

Amortisation has the same meaning as depreciation,but conventionally is used in relation to intangible assets.

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Question 8

True/False

Where an addition to or extension of a depreciable asset is separable from the original asset and able to be used after that asset is disposed of,the extension or addition should still be depreciated over the life of the original asset.

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Question 9

True/False

Depreciation of an asset is required when market value accounting is applied on a non-current asset.

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Question 10

True/False

IASB 16 allows capitalisation of items of plant and property because these are considered prepayments.

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False

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Question 11

True/False

Depreciation expense is always recognised in profit and loss.

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Question 12

True/False

The depreciable base is the cost of a depreciable asset,or other amount substituted for cost in the financial statement,less its residual value.

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Question 13

True/False

Under the declining balance method of depreciation,the depreciable amount of an asset is determined by deducting residual value from cost or revalued amount.

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Question 14

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If the receipt of the sale proceeds on disposal is deferred for a period of time the consideration received is recognised initially at the fair value.

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Question 15

True/False

IASB 16 paragraph 73 states that financial statements shall disclose,for each class of property,plant and equipment the measurement bases used for determining the net carrying amount.

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False

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Question 16

Multiple Choice

If market-value accounting (also known as CoCoA or exit-price accounting)were to be applied in a set of accounts,then typically the treatment for recording depreciation would be:

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restate the residual value and the cost to exit price and recalculate the depreciation.

restate the cost but leave the residual value unchanged and recalculate the depreciation.

no depreciation is recognised.

continue to charge the same depreciation and recognise any changes in value in the income statement.

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Question 17

Multiple Choice

What issues need to be addressed to determine how to allocate the cost of an asset?

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the depreciation method, the probable future benefit and the years to obsolescence

the depreciable base, its useful life and the method of cost apportionment

the cost of the asset, its residual value and the method of cost apportionment

the probable future benefit, the depreciation method and the depreciable base

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Question 18

Multiple Choice

Where an asset is revalued,the treatment of depreciation is to:

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recalculate and charge it to the income statement based on the revalued amount and the original residual value.

charge the original amount of depreciation to the income statement and transfer any change in value to the asset revaluation reserve.

recalculate and charge it to the income statement based on the revalued amount for the asset and the revalued residual value.

charge the original amount of depreciation to the income statement and calculate the new depreciation based on the revalued amount and treat it as a special item.

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Question 19

Multiple Choice

The useful life of an asset may be estimated based on:

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the period of time over which the future economic benefits of the asset are expected to be consumed by the entity.

the total service, expressed in terms of production or similar units that may most likely be obtained from the asset under normal operating conditions.

the period of time over which the future economic benefits of the asset are expected to be generated in normal use by a typical entity.

the total service, expressed in terms of production or similar units that may most likely be obtained from the asset under ideal operating conditions.

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Question 20

Multiple Choice

Assets should be depreciated from:

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the date the asset is ordered.

the date the asset is delivered to the premises until it is no longer in use.

the date the asset is first put into use or held ready for use.

the date the asset is paid for until it is disposed of.

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