ABC Corporation had the following financial data about its assets on its year end December 31,

2022:
Allowance for bad debts 50,000
Advances from customers 100,000
Accounts receivable 500,000
Accumulated depreciation – building 1,600,000
Accumulated depreciation – machinery 1,300,000
Deferred tax asset 100,000
Financial asset at amortized cost 1,500,000
Land 1,500,000
Machinery 2,000,000
Building 4,000,000
Notes receivable 3,000,000
Finished goods inventory 400,000
Franchise 200,000
Financial asset at fair value 25,000
Work in process 700,000
Goodwill 100,000
Claim receivable 80,000
Plant expansion fund 500,000

Compute for the non-current assets

Building 4,000,000
Accumulated depreciation – building 1,600,000 2,400,000
Machinery 2,000,000
Accumulated depreciation – machinery 1,300,000 700,000
Land 1,500,000
Financial asset at amortized cost 1,500,000
Deferred tax asset 100,000
Franchise 200,000
Goodwill 100,000
Non-current assets 6,500,000

PAS 16 defines property, plant and equipment as the tangible assets that are held for use in
production or supply of goods or services, for rental to others, or for administrative purposes, and
are to be expected to be used during more than one period. PAS 1 added that, if the entity’s
assets do not fall into the criteria of being a current asset, it is classified as noncurrent. As to the
case of Land, Building and Machinery, they do not meet the criteria of a current asset. PAS 1
also exclusively provides that Property, plant and equipment are classified as noncurrent assets.
PFRS 9, paragraph 4.1.2 provides that a financial asset shall be measured at amortized cost if
both of the following conditions are met:
1. The business model is to hold the financial asset in order to collect contractual cash flows
on specified dates.
2. The contractual cash flows are solely payments of principal and interest on the principal
amount outstanding.
Financial asset at amortized cost shall be classified as noncurrent asset. Financial assets at
amortized cost include investment in bonds and other debt instruments.

PAS 12, paragraph 24, provides that a deferred tax asset shall be recognized for all deductible
temporary differences and operating loss carryforward when it is probable that taxable income
will be available against which the deferred tax asset can be used. PAS 1 and PAS 12 provides
that deferred tax asset is a noncurrent asset.

PAS 38 provides that an intangible asset is simply defined as an identifiable nonmonetary asset
without physical substance. Under franchise agreement, on party called the franchisor grants
certain rights to another party called the franchisee. Goodwill on the other hand is an intangible
asset that is not specifically identifiable, has an indeterminate life, is inherent in a continuing
business and relates to the entity as a whole. PAS 1 provides that intangible asset is classified as
noncurrent assets.