LET'S

PLAY!
Questionnaires about IAS 16-Property, Plant
and Equipment

START
 Set of theoretical questions
about IAS 16 - PPE

THEORIES
 Question #1

A Depreciated over 20 years

A company purchases land
with an office building. The
B Don’t depreciate the land
building has a useful life of
20 years. How should the Depreciated over useful life of
land be depreciated? C
the land

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 Question #2
If an asset increases in value, the increase is noted as…

A An increase in net profit in the SOCI

An increase in retained earnings in

B
SOFP
An increase in revaluation surplus in the
C SOFP and other comprehensive income in the
SOCI

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 Question #3

A Effective date of revaluation

Which of the following
B Basis used disclosures is not required
when an asset is revalued?
C Name of valuer

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 Question #4

Under IAS 16, if assets A Fair value

are exchanged in an
arms length, B Written down value
commercial
transaction, their value C Carrying value
will be measured at:
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 Question #5

A Initial test batches

Under IAS 16, which
of the following is not B Site preparation
allowable as a directly
attributable cost of a C Delivery
machine?

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 Question #6

A Assets held for sale

Which of the following is
Biological assets related to covered by IAS 16 –
B
agricultural activity Property, Plant and
Equipment?
C Office buildings

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 Question #7

A Depreciation is paused

Under IAS 16, if an asset is

B Depreciation continues
idle…
Depreciation for the entire period
C
does not apply

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 Question #8

The amount by which the carrying

A amount of an asset exceeds the
recoverable amount
The amount by which the market
What is an impairment B value of an asset exceeds the net
present value
loss? The difference between the fair
C value of an asset and the net
realizable value of the asset

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 Question #9

A Measure at market value

How should an asset
be initially recognized B Measure at cost
in the financial
statements? C Measure at net realizable value

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 Question #10

Cost Model & Amortization

A
Cost

Cost Model & Book Value

IAS 16 permits two B
Model
accounting models:
Cost Model & Revaluation
C
Model

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 Set of computational
questions about IAS 16 -
PPE

COMPUTATION
AL
 PROBLEM #1

Company S had the following balances.

Cost of equipment = $300,000
Accumulated depreciation for equipment = $80,000
What is the amount of book value of equipment?

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 PROBLEM #2

Company T had the following balances.

Property, Plant and Equipment = $720,000
Accumulated depreciation = $170,000
What is the amount of net property, plant and equipment?

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 PROBLEM #3
Carpenter company purchased
equipment for P12,000. Sales tax on
A P12,000
the purchase was P600. Other costs
incurred were freight charges of
B P12,600
P240, repairs P420 for damage
during installation, and installation
C P13,110
costs of P270. What is the cost of
equipment?
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 PROBLEM #4
Tyson Chandler Company purchased
equipment for $10,000. Sales tax on
A $10,000
the purchase was $500. Other costs
incurred were freight charges of
B $10,500
$200, repairs of $350 for damage
during installation, and installation
C $10,925
costs of $225. What is the cost of the
equipment?
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 PROBLEM #5
On February 1, 2007, Morgan Corporation purchased a parcel of land as a factory
site for $200,000. An old building on the property was demolished, and
construction began on a new building which was completed on November 1,
2007. Costs incurred during this period are listed below:
Demolition of old building $20,000
Architect's fees $35,000
Legal fees for title investigation and purchase contract $5,000
Construction costs $1,090,000 (Salvaged materials resulting from demolition
were sold for $10,000.)
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 PROBLEM #5

A $225,000 and $1,115,000.

Morgan should record the cost of the land

B $215,000 and $1,125,000.
and new building, respectively, as
C $210,000 and $1,125,000.

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