F7 44-86

Are the following statements true or false, according to IAS 38 Intangible assets? 1. Expenditure during the research phase of a project may sometimes be capitalised as an intangible asset.

2. Expenditure during the development phase of a project may sometimes be capitalised as an intangible asset.

• 1.False & 2.False

• 1.False & 2.True

• 1.True & 2.False

• 1.True & 2.True

Are the following statements true or false, according to IAS 2 Inventories?

1. Cost of factory management should be included in the cost of inventories.

2. Maintenance expenses for an item of equipment used in the manufacturing process should be included in the cost of inventories.

• 1.False 2.False

• 1.False 2.True

• 1.True 2.False

• 1.True 2.True

According to IAS 38 Intangible assets, expenditure during the development phase of a project may sometimes be capitalised as an intangible asset.

• true

• false

Under IAS 16, using the cost model, the asset is accounted for at:

• Cost less accumulated depreciation

• Cost

• Cost less accumulated depreciation and any impairment losses

• Cost less accumulated impairment losses

Which ONE of the following terms best describes the amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal?

• Fair value

• Realisable value

• Residual value

• Value in use

When allocating an impairment loss, such a loss should reduce the carrying amount of which asset first?

• Goodwill

• Property, plant and equipment

• Intangible assets

• Leases

Which of the following does not define an 'asset'?

• A resource that is controlled by an entity as a result of past events

• A resource which value in use exceeds its historical cost

• A resource from which future economic benefits are expected to flow to the entity

• None of the above

MCoset up his demolition business from scratch on 1 January 20X0. Which items should be represented as capital expenditure?

• Rents office premises

• Buy three wrecking machines

• Repair the warehouse roof

• Writes off a damaged machine.

Uggy Co entered into a 4-year lease agreement on 1 January 20X5. The agreement meets the definition of a lease in accordance with IFRS 16. An initial payment of $150,000 was made on 1 January 20X5 followed by three annual payments on 1 January of $110,000 each. The rate implicit in the lease is 10%. Uggy Co incurred initial direct costs of $20,000 to set up the lease. What is the carrying amount of the lease liability at 31 December 20X6?

• 230,000

• 300,909

• 210,000

• 110,000

According to IAS 37 Provisions, contingent liabilities and contingent assets, a present obligation that arises from past events but cannot be reliably measured is a contingent liability.

• true

• false