Don't Use Ai The revaluation model for PPE requires?[A] Annual revaluations only[B] Revaluations at regular intervals with sufficient frequency[C] One-time revaluation at management's discretion[D] Revaluation only when asset is impaired

Concept of Revaluation Model for PPE:The revaluation model is an accounting method used to measure…

Answered: The revaluation model for PPE requires?…

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 1DQ

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Which of the following is a false statement regarding revaluation of PPE?A. Revalued amount is either fair value or depreciated replacement cost.B. If simultaneous revaluation is not possible, revaluation can be done on arolling basis provided revaluation of the class of assets is completed withina short period of time and provided the revaluations are kept up to date.C. The difference between the PPE’s carrying amount and its revalued amount isknown as revaluation surplus and should be presented in the statement ofcomprehensive income, net of applicable tax.D. When an asset's carrying amount is increased as a result of revaluation, theincrease shall always be credited to revaluation surplus regardless of theexistence of previous impairment loss recognized. Which of the following should be included as cost of inventory?A. Depreciation expense of the delivery equipment.B. Depreciation expense of the factory machinery.C. Storage cost of finished goods.D. None from the choices. In…
Impairment of a long-term operating asset occurs when ________. Group of answer choices an asset or part of an asset is removed from the asset portfolio an asset's total future cash-generating ability falls below its carrying value there is a failure to meet the legal obligations or conditions of a loan by which that asset was acquired the carrying value of the asset is systematically reduced over its useful economic life
The optimal switch from declining balance depreciation to straight-line depreciation occurs when what condition is met? a. The first time the depreciation deduction from straight-line depreciation is greater than thesalvage value of the asset b. The first time the depreciation deduction from straight-line depreciation is less than would result if declining balance were continued c. The first time the depreciation deduction from straight-line depreciation is greater than would result if declining balance were continuedd. The asset is no longer in service.
IFRS requires annual reviews of long-lived assets (other than goodwill) for reversal indicators. A loss may be reversed up to the newly estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation. This is a significant departure from GAAP, so what are the financial statement implications? Is it a good thing or bad?
46. Evaluate the following statements: S1. In the sum-of-the-years'-digits method, residual value is not used in the computations of depreciation expense. S2. Straight-line depreciation assumes equal usefulness in each time period, and the periodic charge is not affected by asset productivity or efficiency variations. S3. The residual value of an asset is deducted from the depreciable base when calculating double-declining-balance depreciation. a. True, False, True b. False, True, False c. False, False, True d. False, False, False e. True, True, False f. True, True, True g. False, True, True
Which of the following is a CORRECT statement about long-term asset impairment? A. Under U.S. GAAP, an asset that has been written down because of impairment can be written back up if it increases in value in the future. B. An asset is impaired if the net book value is less than the expected future cash flows. C. If an asset is impaired, the expected future cash flows will exceed the fair value of the asset. D. If an asset is impaired, the impairment loss is the difference between the net book value and the fair value.
Which of the following will cause a company to show a lower amount of amortization ofintangible assets in the first year after acquisition?A. A higher residual valueB. A higher amortization rateC. A shorter useful life
In a replacement analysis, the market value of the currently owned asset a. does not impact the cash flows of the replacement asset(s) in the opportunity cost approach b. does not impact the cash flows of the current asset in the cash flow approach if the current asset is kept c. is treated as a salvage value for the current asset in the cash flow approach if the current asset is kept d. is added to the first cost of the replacement asset(s) in the opportunity cost approach.
Restrictive short-term financial policies with regard to current asset management include three basic actions. List and briefly describe each action.
When identifying undervalued and overvalued assets, which of the following statements is least likely accurate?a. An asset is properly valued if its estimated rate of return is below the required rate of return.b. An asset is considered overvalued if its required rate of return is below its estimated rate of return.c. An asset is considered overvalued if its estimated rate of return is below its required rate of return.d. An asset is considered overvalued if its estimated rate of return is above its required rate of return.e. None of the above
Which of the following statements is true when the straight-line method is used to compute amortization? Multiple Chaice Expense recognizes declines as the asset wears out Accumulated amortization is a constant amount during the asset's estimated useful life. Amortization expense per period is the amortizable cost divided by the number of periods in the asset's useful life. The carrying value of an asset is a constant amount during the asset's useful life. None of the other alternatives are correct
Statement 1: In impairment loss, the discount rate being used is the current pretax rate that reflects the current assessment of the time value of money and the risks specific to the asset. It shall not reflect risk for which the future cash flow estimates have already been adjusted.Statement 2: In computing for impairment of intangible asset with indefinite life, future cash flows are divided by the risk-adjusted discount rate to get the present value. Statements 1 and 2 are true. Statement 1 is true while Statement 2 is false. Statement 1 is false while Statement 2 is true. Statements 1 and 2 are false.

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