Revenue, Inventories, and PPE Flashcards
6 cards from real Certificate in International Financial Reporting practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Revenue, Inventories, and PPE flashcards as text
Under IAS 36, an impairment loss is recognised when an asset's carrying amount exceeds its:
Answer: Recoverable amount
IAS 36 requires recognition of an impairment loss when carrying amount exceeds the higher of fair value less costs of disposal and value in use.
What is 'value in use' under IAS 36?
Answer: Present value of future cash flows expected from the asset
Value in use is the discounted present value of the cash inflows and outflows attributable to the asset.
Under IAS 36, how should an impairment loss for a cash-generating unit (CGU) be allocated?
Answer: First to goodwill, then pro-rata to other assets
IAS 36 requires the impairment loss to reduce goodwill first before being allocated pro-rata to other assets.
Under IAS 16, subsequent expenditure on PPE should be capitalised when:
Answer: It is probable that future economic benefits will flow to the entity and cost can be measured reliably
Subsequent costs meeting the asset recognition criteria (probable benefits + reliable measurement) are capitalised.
Under IAS 40, investment property is defined as property held for:
Answer: Rental income, capital appreciation, or both
IAS 40 defines investment property as property held to earn rentals or for capital appreciation.
Under IAS 40, which model allows changes in fair value of investment property to be recognised in profit or loss?
Answer: Fair value model
Under IAS 40's fair value model, gains and losses from fair value changes go directly to profit or loss.
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