77. AASB 101 Presentation of Financial Statements requires us to consider an entity's normal aperating cycle. Explain what a normal operating cycle is.Chapter 04 Key If an asset's carrying amount is less than its recoverable amount, the increase in value is recognised as a gain. FALSE chapter Chapter 04 #1 Ditty: Easy Seaton’ 4.02 Defrtion of assets The AASB Framework allows use of a different measurement basis for similar assets as long as thisis disclosed in the summary of accounting policies adopted in the notes to the accounts FALSE Chapter - Chapter 042 Ditty: Easy Seaton’ 4.02 Defrtion of assets AASB 101 Presentation of Financial Statements requires all current and non-current assets to be presented in the statement of financial position in the order of maturity. FALSE Chapter - Chapter 0423 Ditty: Easy Section: 4.03 General assication of assetsAASB 116 Property, Plant and Equipment allows both cost and revaluation models to be applied as a measurement basis to one class of property, plant and equipment. FALSE chapter ~ Chapter 0404 Ditty: edurn Section: 4.03 General eassication of assets Previously written-off assets are allowed to be reinstated under AASB 136 /mpairment of Assets. TRUE Chapter - Chapter 0425 Ditty: edurn Seaton: 4.02 Defation of assets AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors requires material prior period errors to be corrected retrospectively, in the period when the error was discovered. TRUE Chapter - Chapter 0426 Ditty: Easy Section’ 4.09 Discover of ere in prior period financlstaternents A reporting entity must have legal ownership of an asset to record it as such within its statement of financial position FALSE Chapter ~ Chapter 0427, Ditty: Easy10. 11 Secon’ 402 Défntion of set The term ‘probable’ is described in the AASB Framework as meaning that the chance of the future economic benefits arising is more likely rather than less likely. FALSE Chapter - Chapter 0478 Ditty: edurn Seaton’ 4.02 Defation of assets Current generally accepted accounting practices require one approach to measurement to be applied to all classes of assets FALSE Chapter - Chapter 0425 Ditty: Easy Seaton’ 4.02 Defrtion of assets The sum of the total assets of an entity will typically reflect their cost under current generally accepted accounting practices FALSE Chapter - Chapter 042416 Ditty: Easy Seaton’ 4.02 Defrtion of assets For an asset to be recognised, it is required to possess a cost or other value that can be measured exactly. FALSE chapter - Chapter oa ent Ditty: Easy12 B 14, 15, Section: 4.02 Definition of assets Advertising expenditures are typically expensed as incurred because the future economic benefits are uncertain to occur. FALSE Chapter - Chapter 04412 Ditty: Easy Sestion:4.05 Determination offture econormic benefits The preserved body of famous Australian racehorse Phar Lap is an example of a heritage asset. TRUE Chapter - Chapter 043813 Ditty: Medurn Seaton: 4.02 Defation of assets For an asset to be recognised it is essential that it be acquired by purchase or exchange of another asset, FALSE Chapter - Chapter 04818 Ditty: Easy Seaton’ 4.02 Defation of assets Future economic benefits can only be derived from the sale of an asset. FALSE Chapter - Chapter 04 215 Ditty: Medurn Seation:4.05 Determination offture econornic benefits16. 17 18, 19, If the expected value in use of an asset is more than its market value, then it is expected that the entity will retain the asset. TRUE Chapter - Chapter 043416 Ditty: Easy Sestion:4.05 Determination offture econormic benefits Relevance and reliability are important considerations for determining the format to use for the purposes of presenting the statement of financial position TRUE chapter Chapter 04817 Ditty: Easy Section:4.04 How to present a statement of financial postion When an asset's recoverable amount is less than the asset's cost, the asset's cost must be written down to recognise an impairment loss. TRUE Chapter - Chapter 04818 Ditty: Easy Sestion:4.05 Determination offture econormic benefits AASB 116 states that the cost of property, plant and equipment must include dismantling, removal and site restoration costs. TRUE Chapter - Chapter 04818 Ditty: Easy Sedion’4.07 Accounting for property, plant snd equprnert—sn introduction20, 24 22, Borrowing costs may include amortisations of discounts or premiums related to borrowings. TRUE chapter Chapter 04 926 Ditty: Easy Section: 4.05 Accounting for propery, plant and equpment—an introduction According to the AASB Framework an asset should have a number of characteristics, including A. It must be owned by the entity. B. It must be expected to provide future economic benefits to the entity. C. The transaction giving rise to the ownership must have already occurred, D. The future economic benefits must be very likely to eventuate. Chapter- chapter 0421 Ditty: Easy Seaton’ 4.02 Defrtion of assets The description of ‘probable’ in the AASB Framework means that A. Assessments of the degree of uncertainty attaching to the flow of economic benefits are made on the basis of evidence. 8. Assets will be recognised if the expected probability of future benefits arising is less than 50%. A A high degree of professional judgment may be required in preparing accounting reports. Ip ). Assessments of the degree of uncertainty and a high degree of professional judgment may be required in preparing accounting reports. chapter Chapter 04 #22 Difieuty: Medurn Seaton’ 4.02 Defation of assets23, Ifit is not probable that expenditure will generate future benefits, the accounting treatment should be: A. to treat it as a deferred asset. 8. to amortise it over a period of no more than two operating cycles. C. to expense it. D. to treat it as unearned revenue. Chapter ~ Chapter 04 #23 Ditty: Easy Seaton’ 4.02 Defrtion of assets24. Bruno Enterprises has constructed a heavy weight hydraulic lifter that it plans to use in maintaining and repairing its fleet of 18 wheeler trucks. The costs to build the lifter were wages of $11 000, raw materials of $19 000, depreciation of $4000 and supplies of $1000. Wages have not yet been paid, The equipment is judged to have probable future economic benefits of greater than its cost. What would be the accounting entry to record this event? Dr_[Equinment expense 6 000 Cr_ [Wages payable 14 000) Cr_[Raw materials inventory 79.000 Cr [Accumulated depreciatian 4000) Cr [Supplies 1009] Dr_[Equipment—hydraulic liter 34000 Cr_ [Wages payable 1 000 Cr_[Raw materials inventory 19.000 Cr_[Accurnulated depreciation 4000) Dr [Equiprnent expense Cr_[Wages expense 14 000 Cr_[Raw materials inventory 79.000 Cr [Accumulated depreciation 000) p, _Dr [Equinment— hydraulic liter B00 “Cr [Wages payable 11-000 Cr_|Raw materials inventory 19 000 Cr_ [Accumulated depreciation 000) Cr [Supplies 1000]25, Bella Enterprises recorded as an asset a piece of equipment purchased for $13 000 this period No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits. What is the appropriate accounting entry? ‘A, _Dr [Loss on write-down of equipment 13.000 Cr [Equipment 13.000 3. _Dr [Equipment 13 000] Cr_[Wiite-down of equipment 13.000) c _Dr [Equipment expense 13.000 Cr_[Write-down of equipment 13.000 b. _Dr [Equipment—depreciation 13 000] Cr [Accumulated depreciation equipment 13.000) Chapter ~ Chapter 08 225 bith Defntion of Seaton:26. 27. The decision to expense or capitalise an item is important because: > It may have direct implications for the value of the organisation and wealth of managers. It may have an impact on contractual arrangements that are based on accounting numbers related to profits and/or assets. C. Itmay give managers scope to maximise personal wealth, in line with Positive Accounting Theories. D. All ofthe given answers are correct. Chapter- chapter 04 926 Ditty: Hara Seaton’ 4.02 Defation of assets In a previous period Banshee Ltd wrote off its ‘dynamic mover’ equipment, but new information has shown that it is probable that the future economic benefits exceed its cost of $40 000. What is the appropriate accounting entry? A. _Dr JEquipment—dynamic mover 40 000 Cr _ Asset revaluation reserve 40 000 B, _Dr [Equipment— dynamic mover 40 000) Cr_[Gain from reversal of previous impairment loss 40000 c. Dr [Wiite-down of equipment 40 000) Cr [Equipment expense 40000 D. _Dr [Equipment—dynamic mover 40 000) Cr [Equipment expense 40000 Chapter - Chapter 04 227 Ditty: Medurn28, 29, Section: 4.02 Definition of assets Land and buildings may be valued at: A recoverable amount. B. opportunity cost. C. fair value D. recoverable amount or fair value. hupter- Chapter 08225 Ditty: Easy Seaton’ 4.02 Defrtion of assets The class of assets that is to be valued at lower than cost or net realisable value is: ‘A. non-current assets 8. debtors. C. self-generating and regenerating assets. D. inventories chapter Chapter 04 #25 Ditty: Easy Seaton’ 4.02 Defrtion of assets30, 31 Which of the following assets are recognised at fair value? A. biological assets 8. revalued property, plant equipment C. assets under a finance lease D, biological assets and revalued property, plant equipment Chopter- chapter 04 #36 Diticaly Easy Sedtion 402 Deition of assets Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset. These characteristics include: > They are not expected to generate net economic benefits They never generate cash inflows. a C. They are unlikely ever to be sold. D, They are not expected to generate net economic benefits and they are unlikely ever to be sold. Chapter - Chapter 04231 Ditty: Easy Section: 4.03 General eassication of assets32, 33, Under AASB 101 the classification of assets into current and non-current will depend on the entity's: > average operating cycle. current accounting period. ©. ordinary course of business 9 normal operating cycle chapter Chapter 04832 Ditty: Hara Section: 4.03 General assication of assets AASB 101's definition of current assets and further discussion at paragraph 59 will ‘A. simplify the recognition of current assets. B, require greater professional judgment in order to determine an entity's normal operating oye. C. improve analysts’ decisions, as ratios that use current assets will use the same information D. have implications for assessing the liquidity of entities as current assets will now include fewer items. hupter- Chapter 04233 Ditty: Hara Section: 4.03 General assication of assets34. 35, In the case of classifying a liability as current or non-current, what approach does AASB 101 require if there is no clearly identifiable operating cycle? A. The most common length of operating cycle for other entities in a comparable industry must be used 8. The operating cycle of the event that gave rise to the creation of the liability must be used as the basis for determining the liability's operating cycle. G. The 12-month period from the reporting date must be used D. The average operating cycle length over all operations of the entity must be used chapter - Chapter 04234 ical edn Seaton’ 403 Genera csicaton of eset The classification of assets into current or non-current in the statement of financial position will provide useful information on the short-term solvency of the entity A. when the entity supplies goods or services within a clearly identifiable normal operating oye. B. when the operating cycle of the entity is greater than 12 months. A when the operating cycle of the entity is less than 12 months. D. when the entity is a financial institution. chupter- Chapter 04235 Difieuty: Medurn Section: 4.03 General eassication of assets36. 37, ‘AASB 101 indicates that when presenting a statement of financial position, an entity should: A. present all assets and liabilities as two groups and disclose their specific classifications in notes as per paragraphs 57-67. 8. only present items on the basis of liquidity if that information is reliable and more relevant. If this is the case, assets should be discretely grouped into current and non-current classifications. G. present items broadly in order of liquidity if that information is reliable and more relevant than following paragraphs 66-76. D. always classify items as current and non-current. chapter Chapter 04836 Ditty: Easy Section:4.04 How to present a statement of financial postion Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities what disclosure is the entity required to make under AASB 101? A. the reason for selecting that style of presentation B, the length of its operating cycle ifit has clearly been identified as being greater than 12 months C. the net amount of working capital D. alist of the assets and liabilities in the order of their liquidity Chapter Chapter 04237 Ditty: Easy Section:4.04 How to present a statement of financial postion38, 39, An asset is classified as current when: A. itis expected to be realised or intended for sale or consumption in the entity's normal operating cycle. 8. the item is held form trading C. itis cash or cash equivalent. D. All of the given answers are correct hupter- Chapter 04235 Ditty: Medurn Section: 4.03 General eassication of assets If an asset's ‘value in use’ exceeds its market value then: > An entity should adjust the current carrying amount of the asset to book value It would be expected that the entity would dispose of the asset immediately. C. An impairment loss will need to be recorded D. It would be expected that the entity would retain the asset. chupter- Chapter 04235 Ditty: Hara Sestion:4.05 Determination offture econormic benefits40. 4 ‘Recognised’ in relation to asset disclosure may be defined as meaning A. disclosed in the notes to the accounts but not reported on, or incorporated in amounts reported on the face of the statement of financial position 8, classified according to nature or type within liquidity categories based on the operating cycle of the reporting entity. G. reported on, or incorporated in amounts reported on, the face of the statement of financial position D. familiar, of well-known usefulness. chapter - Chapter 04246 ical edn Secon 404 How to presenta statement of anc poston AASB 101 requires, as a minimum, certain line items to be included on the face of the statement of financial position . Additional line items may be disclosed based on an assessment of: A. the nature and liquidity of assets. B. the functions of the assets within the entity. C. the amounts, nature and timing of liabilities D. all of the given answers Chapter - Chapter 04241 Ditty: Easy Section:4.04 How to present a statement of financial postion42. 43. Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities, AASB 101 requires items to be disclosed on the face of the statement of financial position , including A. total assets. 8. total liabilities. C total parent entity interest. D. all of the given answers. Chapter - chapter 04.242 Ditty: Easy Section:4.04 How to present a statement of financial postion According to AASB 136, a non-current asset should be: A. revalued downwards where the net amount that is expected to be recovered through the cash inflows and outflows from its continued use and subsequent disposal exceeds its cost. B. written down to its replacement cost when the recoverable amount is greater than its value in use. C. written down to its recoverable amount when its carrying amount is greater than its recoverable amount. D. revalued upwards where its value in use is greater than its net realisable value. chapter - Chapter 04243 Ditty: Medurn Sestion:4.05 Determination offture econormic benefits45. Recoverable amount of an asset is defined in AASB 136 as the higher ofits fair value less costs to sell and its value in use. In the case where an asset's carrying amount is less than its recoverable amount, which action is consistent with AASB 136? ‘A. recognise difference as increase is asset revaluation reserve B, recognise difference as impairment loss C. recognise difference as gain from reinstatement of asset, D. leave asset at its carrying amount Chapter- chapter 04 244 Difiaty: Meda Seation 405 Determination of fture economic benefits It is expected that the service potential of a non-current asset will decline over time. The appropriate accounting treatment is to: A, amortise the asset over its useful life B. disclose the effect in the notes to the statement of financial position if it is material in nature. C. write-off the asset. D. accrue the difference as a payable in adjusting entries at the end of the period. chapter - Chapter 0445 Ditty: Easy Sestion:4.05 Determination offture econormic benefits46. 41. Advertising costs are not typically capitalised because A. It isnot considered probable that the advertising will generate future economic benefits 8. The advertising cannot be controlled by the entity. The future economic benefits cannot generally be measured reliably. D. The cost of the advertising is typically greater than the recoverable amount. chapter - Chapter 04246 Ditty: Medurn Sestion:4.05 Determination offture econormic benefits The effect of capitalising expenditures is to A. decrease current period profit, increase current period assets and decrease future period equity. B, increase current period profit, increase current period assets and decrease future period profit. C increase current period profit, decrease current period assets and decrease future period liabilities. increase current period profit, increase current period equity and increase future period profit. chapter Chapter 0447 Difieuty: Medurn Section: 4.05 Determination offature econarnic benefits48. 49. O'Briens Construction Ltd exchanged equipment that had a book value of $40 000 for a truck that had a book value (in the other entity's books) of $38 000. The fair value of the equipment is $45 000 and the fair value of the truck is $48 000. Further cost incurred to prepare the truck for use by O'Briens was $700 for signage. What is the acquisition cost of the truck? A. $48 700 8. $40 000 C. $48 000 D. $45 700 chapter ~ Chapter 04 48 Ditty: Medurn Section’ 4.07 Accounting for propery, plant and equpment—an inreduction The cost of an asset will typically include the purchase price and: A. other expenditures on material and services to generate the asset. 8. depreciation costs of other assets used to generate the asset. C salaries and wages of the Chief Executive Officer. D. other expenditures on material and services to generate the asset and depreciation costs of other assets used to generate the asset. chapter - Chapter 04 45 Ditty: Easy Section: 4.05 Accounting for propery, plant and equpment—an introduction50. Calling Card Co Ltd has acquired a printing press from Metal Manufacturers Ltd. The deal required Calling Card Co Ltd to exchange the following assets for the printing press [50 O00 shares with a market value of 81.10 each Cost §20 000, accurnulated depreciation $8000; fair value #15 000 Cash $5 000 Shares in Calling Card Co Ltd Vehicle The cost to install the press was $1000 (not yet paid). What is the entry to record the purchase of the printing press? Dr [Printing press 76 000| Dr [Accumulated depreciation e000 Gr_[Share capital 56 000 Cr [Vehicle 20 000) Cr_[Gain on disposal of vehicle 000) Gr [Cash S000) Dr [Printing press 76 000 Dr_[Loss on disposal of vehicle e000 Cr [Share capital 55 000 Cr [Vehicle 20000 Cr_[Installation cost payable 1009] Cr [Cash S000 cc. _Dr [Priming press 75.000 “Dr [Accumulated depreciation 8000 Cr [Share capital 56 000) Cr [Vehicle 20000 Cr_|Gain on disposal of vehicle 3000) Cr_[Installation cost payable “1o09| Gr [Cash 000p. _Dr Printing press 73000 Dr [Accumulated depreciation e000 Cr [Share capital 55 000 Cr [Vehicle 20000 Cr_[Installation cost accrued 1009] Cr [Cash S000 time be treated in the accounts? A. expensed as incurred chapter Chapter 04 56 Ditty: Hara Secon: 4.07 Accounting for propery, plant and equpment—nintreduction accrued and amortised over the period of the loan D. capitalised as part of the cost of the asset 8. capitalised and amortised over the period of the construction of the asset 51. How should borrowing costs relating to an asset being constructed over a substantial period of Chapter - Chapter 04251 Ditty Sedion’ 4.07 Accounting for propery, plant snd equpment—sn introductionGolden Co Ltd has donated a vehicle to Bushman Enterprises as a result of publicity about the plight of Bushman Enterprises after bushfires destroyed most of its fleet of vehicles. The vehicle had cost Golden Co $25 000 and has accumulated depreciation of $10 000. Its market value is $20 000. How should the asset transfer be recorded in both companies’ books? A, Golden Go Lid Dr [Donation expense 16 000] Dr [Accumulated depreciation 10 000 Cr [Vehicle 25 000 Bushman Enterprises Dr_ [Vehicle 20 000] Cr_[Donation revenue 20 000| Golden Co Lid Dr [Donation expense 20 000 Dr [Accumulated depreciation 10-000] Cr [Gain on disposal of vehicle 5000] Cr [Vehicle 25 000 Bushman Enterprises Dr [Vehicle 20 000] Cr [Donation revenue 201 000] Golden Co Ltd Dr [Goodwill 20 000 Dr [Accumulated depreciation 10 000 Cr _|Gain on disposal of vehicle 5000] Cr [Vehicle 25 000 Bushman Enterprises Dr [Vehicle 20000 Cr [Equity 2000053. 54, p, Galden Co Lid Dr [Goodwill 16 000] Dr [Accumulated depreciation 10 000] Cr [Vehicle 25 000 Bushman Enterprises Dr_ [Vehicle 15 000) Cr_[Donation revenue 15 000 chapter Ch Ditty er 04 #52 Section: 4.08 assets acquired a no cost The treatment of repairs and additions to property, plant and equipment can be best described as A. written off as incurred 8. capitalised when it maintains a certain level of service. G. capitalised when the asset's estimated useful life is extended. D. none of the given answers. chapter Ch Ditty er 04 #53 Sedion’ 4.07 Accounting for property, plant and equjpent—an intr Ifthe entity received a donated asset the entity must: A. recognise an asset. B. recognise a liability. recognise an income. D. recognises an asset and an income. chapter ~ Chapter 045455. Ditty: Mediuen Section: 4.09 assets acquired a no cost The accountant in preparation for the financial statement for the year 2013 realised an error in the determination of recoverable amounts in last year's financial statements. This error had it been detected in 2012 would have required the recognition of impairment losses amounting to $500 000. To comply with AASB 108 Accounting Policies Changes in Accounting Estimates and Errors the accountant should: A. make a prospective change to the 2013 figures, on the basis that he has made an error in 2012. 8. make a prospective change to the 2013 figures, on the basis that he is making a change to an estimate in 2012. A make a retrospective change to the 2013 figures, on the basis that that this is a change in accounting estimates. Ig ), make a retrospective change to the 2013 figures, on the basis that he has made an error in 2012. chapter Chapter 04 955 Ditty: Hara Section’ 4.09 Discover of ere in prior period financial staternents56, 57. AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors specifies the accounting treatment for changes in accounting policies, correction of errors and changes in accounting estimates. Which of the following statement(s) in relation to these items is/are true? A. Prior period errors are to be corrected by restating prior period information 8. Voluntary changes in accounting policy are to be accounted for prospectively. C. Changes in accounting estimates are to be accounted for retrospectively, unless it is impracticable to do so D. A change in the useful life of an asset is considered a change in accounting policy. chupter- Chapter 08256 Ditty: Hara Section’ 4.09 Discover of ere in prior period financial staternents Which of the following measurement bases are acceptable for property, plant and equipment? A historical cost 8. revaluation model C. fair value model D. historical cost and revaluation model Chapter Chapter 04257 Ditty: Medurn Section: 4.05 Accounting for propery, plant and equpment—an reduction58. 59. Which of the following are considered to be an asset? A. deposit on a futures contract B. asset under finance lease C. deferred acquisition costs D. All of the given answers are considered assets chapter - Chapter 0458 Difieuty: Medurn Seaton: 4.02 Defation of assets ‘An accountant is not sure about how to recognise an asset that is purchased in excess of fair value. Which of the following action will you recommend? > Recognise the asset at fair value and the excess as goodwill Ie Recognise the asset at fair value and the excess as a loss on purchase. C. Recognise the asset at fair value and the excess as receivable from supplier. D. Recognise the asset at cost. chupter- Chapter 08258 Difieuty: Medurn Sestion:4.05 Determination offture econormic benefits60, 61 Which of the following items is not considered capitalisable cost of property, plant and equipment? A. freight costs 8. import duties C. trade discount D. installation costs Chapter - Chapter 04 #66 Difcuty: Medarn Seaton: 4.02 Defation of assets Sestion:4.05 Determination offture econormic benefits Which of the following items are required to calculate ‘value in use’ of an asset? ‘A. exit and entry prices B. purchase price and cost of disposal G. estimated net future cash flows and appropriate discount rate D. estimated net future cash flows Chapter - Chapter 04261 Ditty: Medurn Sestion:4.05 Determination offture econormic benefits62, 63, If an impairment loss recognised in prior periods for a revalued asset no longer exists, AASB 136 Impairment of Assets requires a reporting entity to: A. reverse the impairment loss to increase the asset to its recoverable amount. 8. reverse the impairment loss in profit and loss, only ifthe asset adopts the revaluation model. . treat this as a prior period adjustment and recognise the reversal as a gain. D. ignore this information as previously written off assets are precluded from being reinstated hapter- Chapter 08262 Ditty: Hara Seaton’ 4.02 Defation of assets ‘A material prior period error in year ending 2009 was subsequently discovered in 2010. To comply with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors an entity should A. reissue the 2009 financial statements with the error corrected. 8. make a retrospective adjustment in 2009 C. make a retrospective adjustment in 2010. >. make a prospective adjustment in 2009, Chopter- chapter 04 263 Ditty: Hara Section: 4.09 Discover of errors in prior period financial staternents65, Applying the asset recognition criteria, which of the following accounting treatments are incorrect? A, Transfer duties were included in the cost of acquisition of the photocopier. B, Monthly servicing of the photocopier was capitalised. C. Monthly servicing of the photocopier was expensed, D. Replacement of a minor component part of the photocopier was expensed. chapter - Chapter 04 64 ia Medi Seton 402 Detain of assets Financial institutions dealing with investments and other financial instruments prefer which method of measurement for that class of assets? A historical cost B, fair value C. present value D. net realisable value chapter Chapter 0405 Difieuty: Medurn Seaton’ 4.02 Defation of assets66. 67. Using the cost model outlined in AASB 116 to measure property, plant and equipment at acquisition, which of the following costs would not be included? A. directly attributable costs 8. initial estimates of dismantling and removal costs C, 12-month servicing plan >. purchase price Chopter- chapter 04 266 Diticaly Easy Section 406 Accounting for prope, plant and equpment—an introduction Certain classes of property, plant and equipment, for example, aircraft, might comprise a number of individual component parts. How does AASB 116 paragraph 43 require these components to be accounted for? A. The components can be measured as one asset. 8. There is a prescribed unit of measurement for recognition that must be followed C. Only one depreciation rate can be used for the asset D. Each component with a significant cost must be depreciated separately. Chapter Chapter 04267 Ditty: Hara Section’ 4.07 Accounting for propery, plant and equpment—an reduction68, 69, 70. When constructing an item of property, plant and equipment, which of the following conditions must be met, for a borrowing cost to be capitalised at the commencement date? A. Expenditure was incurred for the asset. B, Expenditure was necessary to prepare the asset for use. C. Borrowing costs were incurred. D. All of the given answers are correct. chapter Chapter 04 #68 Ditty: Medurn Sedion’4.07 Accounting for property, plant snd equprnert—sn introduction What should an entity do when a material prior period error in asset values is detected? chapter - Chapter 04 #65 Ditty: Medurn Section’ 4.09 Discover of erers in prior period financial statements Distinguish between ownership from control and discuss how this is may affect the definition of an asset. Chapter - Chapter 04 276 Ditty: Medurn Seaton: 4.02 Defation of assets71 Discuss various measurement rules that can be adopted for measurement of assets. chapter ~ Chapter 08.971 Ditty: Medurn Seaton: 4.02 Defation of assets 72. Before an asset can be recognised, the framework requires that an asset satisfy the element that it has some future economic benefits. Discuss the ways wherein future economic benefits can be determined. Chapter - Chapter 08272 Ditty: Medurn Seation:4.05 Determination offture econornic benefits 73. Discuss the approaches recommended by AASB 101 to present assets in the staternent of financial position Chapter - Chapter 04273 Ditty: Medurn Section:4.04 How to present a statement of financial postion74. Discuss the recognition rules of assets purchased in one lump-sum payment. chapter Chapter 04 #74 Difieuty: Medurn Section’ 4.07 Accounting for propery, plant and equpment—an inreduction 75. — Discuss the accounting treatment for restoration costs with respect to acquisition of assets Chapter - Chapter 04475 Difeuty: Medorn Seaton 4.02 Denton of asses Section: 407 Accounting fr propery plant and equjpment—an introduction 76. The opportunistic view under PAT predicts managers to prefer capitalisation over expensing. Discuss. Chapter - Chapter 04276 Ditty: Medurn Sestion:4.05 Determination offture econormic benefits