Property, plant, and equipment are tangible items that:
a. are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.
b. are expected to be used during more than one period.
c. both a and b above
d. none of the answers above are correct
c. both a and b above
IAS 2 requires entities to apply consistently their selected cost method formula in the same way U.S. GAAP requires consistent application of the selected cost method.
TRUE
“Derecognized†means to remove the item from the accounting records.
TRUE
*Not so sure. Should be eliminated from "financial statements"
According to IAS 2, net realizable value is:
a. the estimated selling price in the ordinary course of business.
b. the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
c. the estimated selling price in the ordinary course of business less the estimated costs of completion.
d. None of the above is correct.
b. the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
*(IAS 2.6)
In subsequent periods after the property, plant, or equipment is recorded, the revaluation model is the required accounting policy, and valuation must be done for all companies at the end of each accounting period for both U.S. GAAP and IFRS.
FALSE
*US GAAP: Revaluation is not permitted (ASC 350-30-35-14).
The amount of any reversal of a previous write-down of inventories, arising from an increase in net realizable value, shall be recognized as a reduction in cost of goods sold expense in the period in which the reversal occurs.
TRUE
*Any write-down to NRV should be recognized as an expense in the period in which the write-down occurs. Any reversal should be recognized in the income statement in the period in which the reversal occurs. (IAS 2.34)
The cost of an item of property, plant, and equipment comprises:
a. its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
b. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
c. the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
d. all of the above are correct.
d. all of the above are correct.
IFRS classifies inventories on the balance sheet as:
a. Non-current assets
b. Current assets
c. Current liabilities
d. None of the above
b. Current assets
According to IFRS, the choice of using FIFO or weighted average is a matter of management judgment.
TRUE
IFRS permits the following methods of assigning costs to inventories:
a. FIFO
b. Weighted Average
c. LIFO
d. Both a and b
d. Both a and b
