The following statements are based on PFRS 5 – “Non-current Assets Held for Sale and Discontinued Operations”: Statement 1: An entity shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Statement 2: An extension of the period required to complete a sale does not preclude an asset or disposal group from being classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient evidence that the entity remains committed to its plan to sell the asset (or disposal group). Statement 3: An entity shall measure a non-current asset or disposal group classified as held for sale at the lower of its carrying amount and fair value less costs to sell. A. Only statement 1 is false C. Only statement 3 is true B. Only statement 2 is false D. All of the statements are true

The following statements are based on PFRS 5 – “Non-current Assets Held for Sale and Discontinued Operations”: Statement 1: An entity shall classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Statement 2: An extension of the period required to complete a sale does not preclude an asset or disposal group from being classified as held for sale if the delay is caused by events or circumstances beyond the entity’s control and there is sufficient evidence that the entity remains committed to its plan to sell the asset (or disposal group). Statement 3: An entity shall measure a non-current asset or disposal group classified as held for sale at the lower of its carrying amount and fair value less costs to sell. A. Only statement 1 is false C. Only statement 3 is true B. Only statement 2 is false D. All of the statements are true

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 16DQ

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According to PFRS 5, held for sale classification is permitted when a. the non current asset or disposal group is available for immediate sale in its present condition b. the sale is highly probable C. a and b d. the sale actually occurred after the reporting period but before the financial statements were authorized for issue
13 The entity shall measure a non-current asset that ceases to be classified as held for sale at the lower of carrying amount before the asset was classified as held for sale, adjusted for any depreciation, amortization or revaluations that would have been recognized had the asset not been classified as held for sale, and its value in use at the date of the subsequent decision not to sell. True or False
TRUE OR FALSE? The prior period will be affected if during the current year the management of an entity decides to classify a non currrent asset as held for sale.
68 The entity shall measure a non-current asset that ceases to be classified as held for sale at the lower of carrying amount before the asset was classified as held for sale, adjusted for any depreciation, amortization or revaluations that would have been recognized had the asset not been classified as held for sale, and its value in use at the date of the subsequent decision not to sell. Group of answer choices False True
An entity that acquires an intangible asset may use the revaluation modelfor subsequent measurement only if
The main objective of IAS 36 Impairment of Assets is to prescribe the procedures that should ensure that an entity's assets are included in its statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognized. Required: Define an impairment loss explaining the relevance of fair value less costs to sell and value in use and state how frequently assets should be tested for impairment. 2. Describe the possible incators of impairment. 3. Explain how an impairment loss is accounted for after it has been calculated.
Explain the accounting treatment in the event that an impairment review of a non-current asset which has been previously revalued with a revaluation surplus revealed that the non-current asset has suffered an impairment loss.
Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset. B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition. C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset. D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.
A disposal group may qualify as discontinued operation if a. it is component of an entity b. meets the held for sale classification criteria under PFRS 5 C. a and b d. none of these
Which statement on property, plant and equipment (PPE) is true? * a. PPE items may include assets lacking physical substance b. Assets held for sale shall be classified as PPE while unsold c. As long as an item of PPE provides benefit, regardless of measurability of its cost, it shall be recognized in the books d. When the amount is immaterial, an item may be expensed outright rather than capitalized as PPE e. none of the above
According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such A (1) and (4) B (2) and (3) C (4) only D None of the statements is correct
Ma1. d) In accordance with IAS 36: Impairment of Assets, an entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. If any of such indications exist, the entity shall estimate the recoverable amount of the asset. However, some assets would require mandatory testing for impairment. Required: Outline assets that require mandatory testing for impairment in accordance with IAS 36: Impairment of Assets.