PAS 16 20 23

PAS 16 does apply to

• property, plant and equipment classified as held for sale in accordance with PFRS 5

• biological assets related to agricultural activity other than bearer plants

• the recognition and measurement of exploration and evaluation assets

• bearer plants and land land used for agricultural activity

The cost of an item of property, plant and equipment does not include

• purchase price, including import duties and non-refundable purchase taxes

• 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

• initial estimate of the costs of dismantling and removing the item and restoring the

  site on which it is located

• purchase price, before

  deducting trade discounts and rebates.

Which of the following should not be part of the cost of PPE?

• costs of introducing a new product or service

• costs of site preparation

• installation and assembly costs

• costs of testing whether the asset is functioning properly

After recognition as an asset, an item of property, plant and equipment shall be carried at its

cost less any accumulated depreciation and any accumulated impairment losses. What is this model?

• cost model

• revaluation model

• valuation model

• fair value model

Depreciation of an asset starts when the asset is being delivered on the vicinity of the company.

• True

• False

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be included in profit or loss when the item is derecognized.

• True

• False

PAS 20 does not apply to all, except

• income tax holidays,

  investment tax credits, accelerated depreciation allowances and reduced income tax

  rates.

• government participation in the ownership of the entity

• government grants covered by PAS 41 Agriculture

• building given by the government to a private entity

Government grants related to assets, including non-monetary grants at fair value, shall be

presented in the statement of financial position either by setting up the grant as deferred income

or by deducting the grant in arriving at the carrying amount of the asset.

• TRUE

• FALSE

These are finance charges that are directly attributable to the acquisition, construction

or production of a qualifying asset that forms part of the cost of that asset as per PAS 23

• Borrowing costs

• Finance Charge

• Interest Fee

• Relevant Cost

Capitalization of borrowing costs commences when the entity meets all the following

conditions, except

• It incurs expenditures for the asset

• It incurs borrowing costs

• It undertakes activities that are necessary to prepare the asset for its intended use or sale

• It applies revaluation model