# ACCT 265 Chapter 10 Review

Save this PDF as:

Size: px
Start display at page:

## Transcription

1 ACCT 265 Chapter 10 Review This chapter deals with the accounting for Property Plant & Equipment (PPE) or Capital Assets. When recording cost of PPE, the price of the asset is not the only cost recorded in the balance sheet. Costs to bring the asset to its location, and get it ready for use are also capitalized. The general criteria for recognition of PPE are: - the item s associated future economic benefits will flow to the entity - its costs can be reliably measured Costs associated with different types of assets may have different capitalization criteria: Self-Constructed Assets - Costs directly associated with the construction process such as direct labour and construction material are capitalized - NO fixed overhead costs are included Borrowing Costs - Some assets require financing to be brought into place. Cost of financing such as interest are included in the cost of the asset Dismantling and Restoration Costs - Asset retirement costs are also capitalized Measurement of Cost of Asset Cash Discounts - When a cash discount is offered by the supplier, the cost of the asset is effectively reduced. Therefore, the discounted price is recorded in the books. Deferred Payment Terms - If the asset is to be paid off in installments, the present value of future payments is recognized in the balance sheet. - Assume company XYZ purchases a machine by issuing a \$100,000 notes payable. The current market interest rate is 10%, and the company plans on paying off the note in five \$20,000 payments annually. Journal entry & calculations: First step is to determine the present value of an ordinary annuity factor. Table A-4 on the back of your book has all the factors. Looking up 10% for 5 years in the table gives us a factor of Second step is calculating the present value of five \$20,000 annual payments. The present value turns out to be \$75,816 (\$20,000 x ). Equipment \$75,816 Notes Payable 75,816 Lump Sum Purchases - Sometimes an entity buys a number of assets as part of a packaged deal. Assume XYZ decides to buy several assets from a company for a total cost of \$100,000. The assets include land (fair value 20,000), building (fair value 50,000), and equipment (fair value 50,000). Calculation: First step is to total the fair values of the assets being purchased. The total fair value is \$120,000 (20,000+50,000+50,000). 1

2 Second step is to find the proportion which should be allocated for each asset by dividing the fair value of the asset by the total fair value, and then multiplying it by the lump sum payment. Land= (20,000/120,000) x 100,000 = \$16, The cost of land is recorded as \$16, in the books. Similar steps are taken for other assets. Non-monetary Exchanges - Sometimes a company buys its assets by issuing shares to the supplier. In such a case, an entry of debit to asset and credit to common shares is made. The fair value of the asset is used as the amount to record. If this fair value is not determinable, the fair value of the common shares is used. - At other times, a company will directly exchange one asset with another. At this time a company must determine if the transaction has commercial substance i.e. would the transaction significantly change the future cash-flows. Assume XYZ is exchanging its existing equipment for a new one from a supplier. The new equipment list price is \$16,000. The old equipments cost was \$12,000 and has been depreciated by \$4,000 since acquisition, and has a fair value of \$6,000. The supplier has offered a trade-in allowance of \$9,000 i.e. XYZ must pay \$7,000 (16, ) in addition to giving up the old equipment for the new equipment. - First let s assume the transaction has commercial substance. The calculation and journal entry is: Cost of new machine = fair value of assets given up The fair value of assets being given up is the \$7,000 cash and \$6,000 old equipment. Therefore: Cost of new equipment = \$13,000 (7,000+6,000). The gain (loss) on disposal is fair value of asset - book value of asset. In this case we have a loss of \$2,000 (6,000-8,000). Journal entry: Equipment (new) 13,000 Accumulated Depreciation 4,000 Loss on Disposal 2,000 Equipment (old) 12,000 Cash 7,000 - Now let s assume the transaction above does not have commercial substance. In this case the cost of new equipment is simply the book value of asset being given up plus the fair value of any other asset being given up (in this case 7,000 cash). Journal Entry: Equipment (new) 15,000 Accumulated Depreciation 4,000 Equipment (old) 12,000 Cash 7,000 Contributed Assets & Government Grants - Sometimes a company receives grants, gifts or donations from sources - There are two questions associated with this: how to measure, and where to recognize the transaction. o Asset s fair value should be used as the cost of transaction - Two methods associated with where to recognize: the cost reduction method and the deferral method. 2

3 o Cost reduction method assumes that the amount of assistance received simply decreases the cost of the asset. Assume government gives \$1,000 grant on your fuelefficient hybrid. Cash \$1000 Fuel-efficient Hybrid 1000 o The deferral method amortizes the assistance over the years it will be useful. Now assume that the company chooses to use deferral method. It amortizes the fuel-efficient hybrid for 5 years. The second entry shows the amortization. Cash \$1000 Deferred Revenue-Government Grants 1000 Deferred Revenue-Government Grants 200 Revenue-Government Grants 200 Land - Purchase price, closing costs such as legal fees, costs incurred to condition the land, costs of assuming any liens, and any additional land improvements with indefinite life are capitalized into the Land account o Costs associated with the demolition of an old building on the land are included in the cost of land o Land improvements with finite life are recorded separately and amortized o Land does not depreciate Buildings - Like previously mentioned, cost of demolishing building is added to the cost of land o However, if the company intends to raze a building it already owns to build a new one, these costs are EXPENSED Leasehold Improvements - Cost of any improvements made on leased property is added to a separate account called leasehold improvements. These are amortized over the life of the lease or economic useful life, which ever is shorter. Equipment - The cost of equipment includes purchase price, freight and handling, assembly costs, insurance costs while in transit, and costs of making any adjustments Natural Resource Properties - Costs associated with acquired rights, and the exploration, evaluation, and development are capitalized Biological Assets - Biological assets are measured initially at cost, and then at fair value less cost to sell at every balance sheet date. o The change in value of the biological asset is recognized in income. 3

4 Measurement after Acquisition - Under IFRS, PPE is measured under two methods after acquisition: cost and revaluation model. o Investment property is measured using cost and fair value model - Cost model is simply depreciating the asset every year i.e. cost less accumulated amortization - Under the revaluation model, the assets are carried at their fair value at the date of the revaluation less any subsequent accumulated depreciation and any subsequent impairment losses. o Revaluation date is determined by the management. Any increase in the asset amount is recorded under an equity account known as Revaluation Surplus, unless the increase reverses a previously recorded loss (from a decrease in the revaluation). o Assume company XYZ has a building worth\$975,000 (original cost \$1,000,000, less accumulated depreciation 25,000) on its books, purchased last year. The useful life of the building is 40 years. Assume the assets fair value on the balance sheet date this year is \$980,000. The calculation and journal entry is as follows: The accumulated depreciation amount at the end of the year should be \$50,000 ( /40 x 2). The Revaluation surplus is calculated as: 30,000 [980,000 - (1,000,000-50,000)] Accumulated Depreciation \$50,000 Building 50,000 Building 30,000 Revaluation Surplus 30,000 o Now assume that end of next year, the fair value of the building is 920,000. Management decides to revaluate the building. First we record the depreciation of the building. Depreciation is 25,789.47(980,000/38). Since the revaluation entry last year left the Accumulated amortization balance as zero, the book value of building is 954, (980,000 building, 25, accumulated depreciation). The revaluation is calculated as -34, [920, ,210.53]. Journal entry: Accumulated Depreciation \$25, Building 25, Revaluation Surplus 30,000 Revaluation Loss 4, Building 34, The Fair Value model is explained in Chapter 9. Refer to Chapter 9 worksheet for detailed explanation 4

5 Costs Incurred after Acquisition - Some costs incurred after the acquisition can be capitalized - The criterion is that these costs INCREASE economic future benefits of the asset. o Costs which are merely a restoration cost are not capitalized, but are expensed - Additions include adding new PPE by purchasing more assets. These costs are automatically capitalized. - Rearrangement and Reinstallation costs are expensed. This is because during the acquisition of the asset, installation costs were already paid. - Repair costs are expensed in the period they are incurred. 5

### C H A P T E R 10 ACQUISITION AND DISPOSITION OF PROPERTY, PLANT, AND EQUIPMENT

10-1 C H A P T E R 10 ACQUISITION AND DISPOSITION OF PROPERTY, PLANT, AND EQUIPMENT Intermediate Accounting IFRS Edition Kieso, Weygandt, and Warfield 10-2 Learning Objectives 1. Describe property, plant,

### INTANGIBLE ASSETS IAS 38

INTANGIBLE ASSETS IAS 38 Road Map on IAS 38 1. Definition of intangible asset 2. Recognition and measurement 3. Recognition of expense 4. Measurement after recognition 5. Useful life 6. Intangible assets

### Accounting for Property Classification is Key!

Accounting for Classification is Key! Article by Helen Fee, BSc, PgD, FCA, Examiner in Professional 2 Advanced Corporate Reporting Introduction Entities hold land and buildings for a variety of reasons

### Accounting for Property, Plant and Equipment

Accounting for Property, Plant and Equipment Author: Noel O Brien, FCCA, Examiner Formation 2 Financial Accounting Introduction The accounting for property, plant and equipment requires the proper application

### IAS 16 Property, Plant and Equipment

IAS 16 Property, Plant and Equipment By: Martin Kelly, BSc (Econ) Hons, DIP. Acc, FCA, MBA, MCMI. Teaching Fellow in Accounting Queens University Belfast Examiner: Professional 1 Corporate Reporting This

### NEPAL ACCOUNTING STANDARDS ON PROPERTY, PLANT AND EQUIPMENT

NAS 06 NEPAL ACCOUNTING STANDARDS ON PROPERTY, PLANT AND EQUIPMENT CONTENTS Paragraphs OBJECTIVE 1 SCOPE 2-5 DEFINITIONS 6 RECOGNITION 7 14 Initial cost 11 Subsequent cost 12-14 MEASUREMENT AT RECOGNITION

### CHAPTER 10. Acquisition and Disposition of Property, Plant, and Equipment 1, 2, 3, 5, 6, 11, 12, 21 11, 15, 16 8, 9, 10, 11, 12

CHAPTER 10 Acquisition and Disposition of Property, Plant, and Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Valuation

### Financial Accounting and Reporting Exam Review. Fixed Assets. Chapter Five. Black CPA Review www.blackcpareview.com Chapter 5

Fixed Assets Chapter Five Black CPA Review www.blackcpareview.com Chapter 5 Objectives: Objective 1: Know which costs associated with the purchase of fixed assets are capitalized Objective 2: Understand

### ASSURANCE AND ACCOUNTING ASPE - IFRS: A Comparison Intangible Assets

ASSURANCE AND ACCOUNTING - : A Comparison Intangible Assets In this publication we will examine the key differences between Accounting Standards for Private Enterprises () and International Financial Reporting

### IAS 38 Intangible Assets

2012 Technical Summary IAS 38 Intangible Assets as issued at 1 January 2012. Includes IFRSs with an effective date after 1 January 2012 but not the IFRSs they will replace. This extract has been prepared

### Chapter 9. Plant Assets. Determining the Cost of Plant Assets

Chapter 9 Plant Assets Plant Assets are also called fixed assets; property, plant and equipment; plant and equipment; long-term assets; operational assets; and long-lived assets. They are characterized

### SOLUTIONS TO EXERCISES

EXERCISE 10-1 (15 20 minutes) SOLUTIONS TO EXERCISES Item Land Land Improvements Building Other Accounts (a) (\$275,000) Notes Payable (b) \$275,000 (c) \$ 8,000 (d) 7,000 (e) 6,000 (f) (1,000) (g) 22,000

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

International Accounting Standard 16 Property, Plant and Equipment Objective 1 The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of

### Property, Plant and Equipment IPSAS 17. Presented by CPA Peter Njuguna

Property, Plant and Equipment IPSAS 17 Presented by CPA Peter Njuguna +254 722 608 618 Property, Plant and Equipment Tangible assets that are: Held for use in the production or supply of goods or services,

### ACCOUNTING POLICY 1.1 FINANCIAL REPORTING. Policy Statement. Definitions. Area covered. This Policy is University-wide.

POLICY Area covered ACCOUNTING POLICY This Policy is University-wide Approval date 5 May 2016 Policy Statement Intent Scope Effective date 5 May 2016 Next review date 5 May 2019 To establish decisions,

### Property, Plant and Equipment

STATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 16 Property, Plant and Equipment SB-FRS 16 Property, Plant and Equipment applies to Statutory Boards for annual periods beginning on or after 1 January

### Sri Lanka Accounting Standard LKAS 16. Property, Plant and Equipment

Sri Lanka Accounting Standard LKAS 16 Property, Plant and Equipment CONTENTS paragraphs SRI LANKA ACCOUNTING STANDARD LKAS 16 PROPERTY, PLANT AND EQUIPMENT OBJECTIVE 1 SCOPE 2 DEFINITIONS 6 RECOGNITION

### This version includes amendments resulting from IFRSs issued up to 31 December 2010.

International Accounting Standard 12 Income Taxes This version includes amendments resulting from IFRSs issued up to 31 December 2010. IAS 12 Income Taxes was issued by the International Accounting Standards

### International Accounting Standard 40 Investment Property. Objective. Scope. Definitions IAS 40

International Accounting Standard 40 Investment Property Objective 1 The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

### Property, Plant and Equipment

Indian Accounting Standard (Ind AS) 16 Property, Plant and Equipment Property, Plant and Equipment Contents Paragraphs OBJECTIVE 1 SCOPE 2-5 DEFINITIONS 6 RECOGNITION 7 14 Initial costs 11 Subsequent costs

### Module 9: Property, plant and equipment (PPE) and intangible assets

Module 9: Property, plant and equipment (PPE) and intangible assets Overview In this module, you learn about the valuation of property, plant and equipment (PPE) and intangible assets, and the cost components

### Residual carrying amounts and expected useful lives are reviewed at each reporting date and adjusted if necessary.

87 Accounting Policies Intangible assets a) Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of identifiable net assets and liabilities of the acquired company

### Chapter 10 Operational Assets: Acquisition and Disposition

Chapter 10 Operational Assets: Acquisition and Disposition QUESTIONS FOR REVIEW OF KEY TOPICS Question 10-1 The term operational asset is used to describe the broad category of long-lived assets that are

### Accounting Standard-6, 10 and 28

S. Aparna, FCA Accounting Standard-6, 10 and 28 AS 6- Depreciation Accounting AS 10- Accounting for fixed assets AS-28- Impairment of assets Applies to all depreciable assets except Forests, plantations

### FUNDAMENTALS OF IFRS

INVESTMENT PROPERTY (IAS 40) FUNDAMENTALS OF IFRS 20.1 FUNDAMENTALS OF IFRS CHAPTER 20 Investment Property (IAS 40) 20.2 CHAPTER TWENTY INVESTMENT PROPERTY (IAS 40) 20 Introduction Investment Property

### Indian Accounting Standard (Ind AS) 16 Property, Plant and Equipment

Contents Indian Accounting Standard (Ind AS) 16 Property, Plant and Equipment Objective 1 Scope 2-5 Definitions 6 Recognition 7 14 Initial costs 11 Subsequent costs 12 14 Measurement at recognition 15

### CHAPTER 10. Acquisition and Disposition of Property, Plant, and Equipment 1, 2, 3, 4, 6, 7, 12, 13, 18 16, 18, 19, 22

CHAPTER 10 Acquisition and Disposition of Property, Plant, and Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Valuation

### NEPAL ACCOUNTING STANDARDS ON INVESTMENT PROPERTY

NAS 19 NEPAL ACCOUNTING STANDARDS ON INVESTMENT PROPERTY CONTENTS Paragraphs OBJECTIVE 1 SCOPE 2-5 DEFINITIONS 6-16 RECOGNITION 17-20 MEASUREMENT AT RECOGNITION 21-30 MEASUREMENT AFTER RECOGNITION 31-57

### IND AS -16 Property Plant and Equipments

Ashish Mistry / Jignesh Me IND AS -16 Property Plant and Equipments AS 10 : Accounting for fixed assets IND AS -16: Property Plant and Equipments AS 6 : Depreciation accounting Schedule II of CA2013 Scope

### ACCOUNTING FOR AND AUDIT OF PROPERTY, PLANT AND EQUIPMENT

ACCOUNTING FOR AND AUDIT OF PROPERTY, PLANT AND EQUIPMENT PRESENTED BY SOLOMON SIMEON MANAGER: PEAK PROFESSIONAL SERVICES IN HOUSE SEMINAR SERIES NO 2 PEAK PROFESSIONAL SERVICES (CHARTERED ACCOUNTANTS)

### Property, Plant and Equipment

International Accounting Standard 16 Property, Plant and Equipment This version includes amendments resulting from IFRSs issued up to 31 December 2008. IAS 16 Property, Plant and Equipment was issued by

### 4. The cost principle has survived because it provides information that is objective and verifiable.

BAT4M - Solutions ANSWERS TO QUESTIONS 1. Tangible and intangible capital assets both are long-lived assets that are used by a business to produce revenue. The difference between them is that tangible

### Chapter Overview Chapter 10 Acquisition and Disposition of Property, Plant, and Equipment Learning Objectives Learning Objectives Chapter Overview

Chapter 10 Chapter Overview Acquisition and Disposition of Property, Plant, And Equipment Chapter 10 Valuation at date of acquisition Disposition of assets Annual reports: Dr. Pepper, Winnebago, Intel,

### IND AS 16 PROPERTY PLANT & EQUIPMENT VS AS 10 ACCOUNTING FOR FIXED ASSETS

IND AS 16 PROPERTY PLANT & EQUIPMENT VS AS 10 ACCOUNTING FOR FIXED ASSETS CPE Seminar for Members at Visakhapatnam IND AS 16 VS AS 10 Definition of Fixed Asset AS 10 Definition of PPE Ind AS 16 Fixed asset

### HKAS 12 Revised May November 2014. Hong Kong Accounting Standard 12. Income Taxes

HKAS 12 Revised May November 2014 Hong Kong Accounting Standard 12 Income Taxes HKAS 12 COPYRIGHT Copyright 2014 Hong Kong Institute of Certified Public Accountants This Hong Kong Financial Reporting Standard

### Intangible assets other than Goodwill, Business combinations and Goodwill

Intangible assets other than Goodwill, Business combinations and Goodwill 1.1. Recognition An entity shall apply the recognition criteria stated in Section Concepts and Principles of IFRS for SMEs for

### IAS 16 Property, Plant and Equipment - A Closer Look

MPRA Munich Personal RePEc Archive IAS 16 Property, Plant and Equipment - A Closer Look K S Muthupandian The Institute of Cost and Works Accountants of India 20. March 2009 Online at https://mpra.ub.uni-muenchen.de/39902/

### The statements are presented in pounds sterling and have been prepared under IFRS using the historical cost convention.

Note 1 to the financial information Basis of accounting ITE Group Plc is a UK listed company and together with its subsidiary operations is hereafter referred to as the Company. The Company is required

### CHAPTER 16. Non-current assets: Revaluation, disposal and other aspects CONTENTS

CHAPTER 16 Non-current assets: Revaluation, disposal and other aspects CONTENTS 16.1 Non-current asset disposals 16.2 Revaluation and disposal 16.3 Intangibles and natural resources 16.4 Goodwill and discount

### Accounting and Reporting Policy FRS 102. Staff Education Note 5 Property, plant and equipment

Accounting and Reporting Policy FRS 102 Staff Education Note 5 Property, plant and equipment Disclaimer This Education Note has been prepared by FRC staff for the convenience of users of FRS 102 The Financial

### INDONESIAN INSTITUTE OF ACCOUNTANTS FIXED ASSETS AND OTHER ASSETS

STATEMENT OF SFAS No. FINANCIAL ACCOUNTING STANDARD 16 INDONESIAN INSTITUTE OF ACCOUNTANTS FIXED ASSETS AND OTHER ASSETS Statement of Financial Accounting Standard (SFAS) No.16, Fixed Assets and Other

### Sri Lanka Accounting Standard -LKAS 40. Investment Property

Sri Lanka Accounting Standard -LKAS 40 Investment Property -1088- 85-1089- 4 This Standard does not apply to: biological assets related to agricultural activity (seelkas 41 Agriculture); and mineral rights

### Accounting and Depreciation Treatment of Fixed Assets with reference IAS/IFRS.

Accounting and Depreciation Treatment of Fixed Assets with reference IAS/IFRS. 1 Table of Content:- Introduction Interpretation of IAS 16 IAS vs. IFRS Analysis Conclusion Bibliography 2 Introduction The

### Accounting Standards 6 and 10. Depreciation Accounting and. Financial Audit Autonomous Bodies, AS 6 and AS Session 1.5 9

Accounting Standards 6 and 10 on Depreciation Accounting and Accounting for Fixed Assets 1 Session Coverage AS-6 Depreciation Accounting ; and AS-10 Accounting for Fixed Assets 2 Learning Objective At

### International Financial Reporting Standards (IFRS)

FACT SHEET September 2011 IAS 16 Property, Plant and Equipment (This fact sheet is based on the standard as at 1 January 2011.) Important note: This fact sheet is based on the requirements of the International

### The consolidated financial statements of

Our 2014 financial statements The consolidated financial statements of plc and its subsidiaries (the Group) for the year ended 31 December 2014 have been prepared in accordance with International Financial

### Audit Program for Fixed Assets

Form AP 35 Index Audit Program for Fixed Assets Legal Company Name Client: Balance Sheet Date: Instructions: The auditor should refer to the audit planning documentation to gain an understanding of the

### accounting for property, plant and equipment

01 technical accounting for property, plant and equipment RELEVANT TO ACCA QUALIFICATION PAPER F7 The accounting for IAS 16, Property, Plant and Equipment is a particularly important area of the Paper

### Transition to International Financial Reporting Standards

Transition to International Financial Reporting Standards Topps Tiles Plc In accordance with IFRS 1, First-time adoption of International Financial Reporting Standards ( IFRS ), Topps Tiles Plc, ( Topps

### IAS 16 Property Plant and Equipment Prepared by: Salman Saeed Opentuition Study Sessions for December 2010

IAS 16 Property Plant and Equipment Prepared by: Salman Saeed Opentuition Study Sessions for December 2010 Syllabys Guide a) Define and compute the initial measurement of a non-current (including a self-constructed)

### ASSIGNMENT CHARACTERISTICS TABLE

CHAPTER 9 Long-Lived Assets ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises Problems Set A Problems Set B 1. Apply the cost principle to property, plant, and equipment.

### Investment Property. International Accounting Standard 40 IAS 40

International Accounting Standard 40 Investment Property This version includes amendments resulting from IFRSs issued up to 31 December 2008. IAS 40 Investment Property was issued by the International

### International Accounting Standard 16 (IAS 16), Property, Plant and Equipment

International Accounting Standard 16 (IAS 16), Property, Plant and Equipment By BRIAN FRIEDRICH, MEd, CGA, FCCA(UK), CertIFR and LAURA FRIEDRICH, MSc, CGA, FCCA(UK), CertIFR Updated By STEPHEN SPECTOR,

### The Town of Fort Frances POLICY SECTION ACCOUNTING FOR TANGIBLE CAPITAL ASSETS. ADMINISTRATION AND FINANCE NEW: May 2009 1. PURPOSE: 2.

The Town of Fort Frances ACCOUNTING FOR TANGIBLE CAPITAL ASSETS SECTION ADMINISTRATION AND FINANCE NEW: May 2009 REVISED: POLICY Resolution Number: 05/09 Consent 156 Policy Number: 1.18 PAGE 1 of 11 Supercedes

### IAS 16 Property, Plant and Equipment Prepared by: Paddingtonbear aka John Kevin Andrews For: Open Tuition Study Session February 2010

IAS 16 Property, Plant and Equipment Prepared by: Paddingtonbear aka John Kevin Andrews For: Open Tuition Study Session February 2010 IT IS ESSENTIAL TO READ THESE ARTICLES!! FR F7 This is the official

### EUROPEAN UNION ACCOUNTING RULE 6 INTANGIBLE ASSETS

EUROPEAN UNION ACCOUNTING RULE 6 INTANGIBLE ASSETS Page 2 of 17 I N D E X 1. Objective... 3 2. Scope... 3 3. Definitions... 3 4. Definition of intangible assets... 4 5. Recognition and Measurement... 5

### Accounting for Fixed Assets

96 Accounting Standard (AS) 10 Accounting for Fixed Assets Contents INTRODUCTION Paragraphs 1-6 Definitions 6 EXPLANATION 7-17 Identification of Fixed Assets 8 Components of Cost 9 Self-constructed Fixed

### Asset Management Procedure

1 Purpose Effective asset management and capital expenditure are essential to the continuity, development and growth of Victoria University of Wellington ( the University ). They are closely linked to

### NEPAL ACCOUNTING STANDARDS ON BUSINESS COMBINATIONS

NAS 21 NEPAL ACCOUNTING STANDARDS ON BUSINESS COMBINATIONS CONTENTS Paragraphs OBJECTIVE 1 SCOPE 2-14 Identifying a business combination 5-10 Business combinations involving entities under common control

### Property, Plant and Equipment

Compiled AASB Standard AASB 116 Property, Plant and Equipment This compiled Standard applies to annual reporting periods beginning on or after 1 July 2009. Early application is permitted. It incorporates

### IPSAS 17 PROPERTY PLANT & EQUIPMENT. IPSAS Accrual Accounting Workshop-Jabatan Akauntan Negara Aug2012 1

IPSAS 17 PROPERTY PLANT & EQUIPMENT 1 Contents Introduction IPSAS 17 Property, Plant and Equipment Summary and Conclusion 2 Introduction Objective of IPSAS 17 Principal issues 3 Objective of IPSAS 17 To

### Chapter 3 the balance sheet and the statement of changes in stockholder. equity

Full Picture for Intermediate Accounting (I) Chapter 3 the balance sheet ASSET LIABILITY Current Chapter 6 cash and receivables Chapter 7/8 inventories Chapter 12 current liabilities and contingencies

### Ind AS 38 INTANGIBLE ASSETS

Ind AS 38 INTANGIBLE ASSETS 1 DEFINITIONS OF KEY TERMS Intangible asset. An identifiable, nonmonetary asset without physical substance. Asset. A resource controlled by an entity as a result of past events

### Volex Group plc. Transition to International Financial Reporting Standards Supporting document for 2 October 2005 Interim Statement. 1.

Volex Group plc Transition to International Financial Reporting Standards Supporting document for 2 October 2005 Interim Statement 1. Introduction The consolidated financial statements of Volex Group plc

### IPSAS 16 - INVESTMENT PROPERTY as adopted by the Maltese Government

IPSAS 16 - INVESTMENT PROPERTY as adopted by the Maltese Government Issued DD/MM/YY This Standard was issued by the IPSAS Implementation Board pursuant to section X of the X Act 201X IPSAS 16 IPSAS 16

### Sri Lanka Accounting Standard-LKAS 38. Intangible Assets

Sri Lanka Accounting Standard-LKAS 38 Intangible Assets CONTENTS paragraphs SRI LANKA ACCOUNTING STANDARD -LKAS 38 INTANGIBLE ASSETS OBJECTIVE 1 SCOPE 2 7 DEFINITIONS 8 17 Intangible assets 9 17 Identifiability

### International Accounting Standard 40 Investment Property

International Accounting Standard 40 Investment Property Objective 1 The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

### 13 BUSINESS ACCOUNTING STANDARD INTANGIBLE ASSETS I. GENERAL PROVISIONS

APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania (Revised version of Order No. VAS-8 of 20 November

### 3. ACCOUNTING. 3.3 Capital Assets 3.3.4 Capital Asset System Accounting

3. ACCOUNTING 3.3 Capital Assets 3.3.4 Capital Asset System Accounting 3.3.4.10 Once the capital asset system is in operation, the government needs to make sure that assets which should be capitalized

### IFRS Demystified Case Study

15 IFRS Demystified Case Study Accounting for Revaluation of Property, Plant and Equipment IFRS Demystified Case Study Accounting for Revaluation of Property, Plant and Equipment Learning outcome This

### Acquisition and Disposition of Property, Plant, and Equipment CHAPTER 10

Acquisition and Disposition of Property, Plant, and Equipment CHAPTER 10 Property, Plant and Equipment Property, Plant, and Equipment (Fixed Asset or Plant Asset) Historical cost principle Includes any

### Chapter 13. Leases: Lessee Accounting

Leases: Lessee Accounting Reference: IAS 17 Contents: 1. Introduction 2. Definitions 3. Lease classification 3.1 Overview Example 1: leases 3.2 Land and buildings Example 2: lease of land and buildings

### Student Learning Outcomes

Chapter 15 Leases Part 2: Capital Leases Intermediate Accounting II Dr. Chula King Student Learning Outcomes Explain and use the criteria for determining whether a lease is capital or not Describe and

### Accounting Notes. Types (classifications) of Assets:

Types (classifications) of s: 1) Current s - short lived assets used in the operations of a business 2) Plant s - long lived tangible assets used in the operations of a business 3) Long Term Investment

### 10/25/2012. Today s Agenda. Objective. MHM Executive Education Series: IAS 40 - Investment Property

MHM Executive Education Series: IAS 40 - Investment Property Presented by: Keith Peterka Shareholder, Mayer Hoffman McCann P.C. October 25, 2012 Today s Agenda IAS 40 Investment Properties U.S. GAAP Project

### Ind AS 16 Property, Plant And Equipment. Ind AS Workshop (Organised by YMEC of ICAI) Hotel Kempinski, Vishwas Nagar July 26, 2015

Ind AS 16 Property, Plant And Equipment Ind AS Workshop (Organised by YMEC of ICAI) Hotel Kempinski, Vishwas Nagar July 26, 2015 Applicable Guidance IGAAP AS 10: Accounting for Fixed Assets AS 6 : Depreciation

### NAMA CHEMICALS COMPANY AND SUBSIDIARIES (SAUDI JOINT STOCK COMPANY)

CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND AUDITORS REPORT (LIMITED REVIEW) CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND AUDITORS REPORT INDEX PAGE Auditors report (limited review) 1 Consolidated interim

### SECTION VI. ACCOUNTING FOR FIXED ASSETS

SECTION VI. ACCOUNTING FOR FIXED ASSETS A. IAS 16, 23, 36 IAS 16 concerns Property, Plant and Equipment. IAS 36 concerns impairments of assets. IAS 23 concerns borrowing costs for certain qualifying assets.

### COMPONENTS OF THE STATEMENT OF CASH FLOWS

ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling

### IFRS: Accounting for Property Plant and Equipment Presented at 34 th Annual Accounting and Auditing Conference May 20-21, 2009

IFRS: Accounting for Property Plant and Equipment Presented at 34 th Annual Accounting and Auditing Conference May 20-21, 2009 Atul Rai, Ph.D. School of Accountancy Barton School of Business Wichita State

### Accounting policies for the year ended 31 March 2012

Accounting policies 1. Basis of preparation The financial statements have been prepared in accordance with the Standards of GRAP including any interpretations, guidelines and directives issued by the Accounting

### AS -11 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES IPCC PAPER 5 ADVANCED ACCOUNTING CHAPTER 2 CA. ANAND J. BANKA

AS -11 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES IPCC PAPER 5 ADVANCED ACCOUNTING CHAPTER 2 CA. ANAND J. BANKA OBJECTIVE An enterprise may carry on activities involving foreign exchange in two ways.

### Dip IFR. Diploma in International Financial Reporting. Tuesday 9 December 2014. The Association of Chartered Certified Accountants.

Diploma in International Financial Reporting Tuesday 9 December 2014 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Dip IFR Do NOT

### Aldar Properties PJSC

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2016 INTERIM CONSOLIDATED INCOME STATEMENT Three months ended 30 June Six months ended 30 June Notes Revenue 1,695,915 1,105,633 2,927,912

### ACCOUNTING FOR PROPERTY, PLANT AND EQUIPMENT

Issued 03/01, Revised 11/01 Revised 02/02, Revised 10/03 Institute of Chartered Accountants of New Zealand FINANCIAL REPORTING NO. 3 2001 ACCOUNTING FOR PROPERTY, PLANT AND EQUIPMENT Issued by the Financial

### Intermediate Accounting

Intermediate Accounting Thomas H. Beechy Schulich School of Business, York University Joan E. D. Conrod Faculty of Management, Dalhousie University PowerPoint slides by: Bruce W. MacLean, Faculty of Management,

### Notes to the Financial Statements

These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on February 26, 2009. 1. DOMICILE AND ACTIVITIES Sembcorp Industries

### Accounting policies Basis of preparation Significant judgements, key assumptions and estimates Revenue recognition Impairment

Accounting policies Basis of preparation The accounts have been prepared in accordance with the Companies Act 2006 applicable to companies reporting under International Financial Reporting Standards (IFRS)

### Indian Accounting Standard (Ind AS) 12. Income Taxes

Indian Accounting Standard (Ind AS) 12 Contents Income Taxes Paragraphs Objective Scope 1 4 Definitions 5 11 Tax base 7 11 Recognition of current tax liabilities and current tax assets 12 14 Recognition

### Accounting and reporting by charities

10. Balance sheet Introduction 10.1. All charities preparing accruals accounts must prepare a balance sheet at the end of each reporting period which gives a true and fair view of their financial position.

### Investment Property. Indian Accounting Standard (Ind AS) 40. Investment Property

Investment Property Indian Accounting Standard (Ind AS) 40 Investment Property Contents Paragraphs OBJECTIVE 1 SCOPE 2 4 DEFINITIONS 5 15 RECOGNITION 16 19 MEASUREMENT AT RECOGNITION 20-29 MEASUREMENT

### 6. Depreciation is a process of a. asset devaluation. b. cost accumulation. c. cost allocation. d. asset valuation.

1. A company purchased land for \$72,000 cash. Real estate brokers' commission was \$5,000 and \$7,000 was spent for demolishing an old building on the land before construction of a new building could start.

### Indian Accounting Standard (Ind AS) 40 Investment Property

Indian Accounting Standard (Ind AS) 40 Investment Property Contents Paragraphs OBJECTIVE 1 SCOPE 2 4 DEFINITIONS 5 15 RECOGNITION 16 19 MEASUREMENT AT RECOGNITION 20-29 MEASUREMENT AFTER RECOGNITION 30-56

### Dip IFR. Diploma in International Financial Reporting. Friday 11 December 2015. The Association of Chartered Certified Accountants.

Diploma in International Financial Reporting Friday 11 December 2015 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Dip IFR Do NOT

### A change of classification in presentation in financial statements is a change of accounting policy (CAP) under IAS 8.

Answers Fundamentals Level Skills Module, Paper F7 Financial Reporting December 2014 Answers Section A 1 A A change of classification in presentation in financial statements is a change of accounting policy

### Il nuovo PGC ed i principi contabili per le PMI in Spagna

Il nuovo PGC ed i principi contabili per le PMI in Spagna 2 February 2010 Dr. José M. Bové Vice-president, FEE Content About FEE About the New General Accounting Plan 2 Federating Member Bodies 43 professional

### Universal Weather and Aviation. Capital Lease Policy #2-3.0016

Universal Weather and Aviation Capital Lease Policy #2-3.0016 Approved on: November 3, 2010 Table of Contents Policy... 1 1.0 Purpose... 1 2.0 Scope... 1 3.0 Responsibility... 1 4.0 Policy... 1 4.1 Leases...

### International Accounting Standard 36 Impairment of Assets

International Accounting Standard 36 Impairment of Assets Objective 1 The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more