Exam 18: Property, Plant Equipment

Which of the following statements is not correct in relation to the disclosure of property, plant and equipment balances?

Gillet Limited acquired a block of land for $150 000 on 1 January 2012. This amount was also the tax base of the land. On 30 June 2014, the land was revalued to $200 000. The tax rate is 30%. The appropriate journal entry to recognise the net effect of the revaluation is which of the following?

Property, plant and equipment are assets that:

Which of the following depreciation methods is most appropriate when the asset's benefits are expected to be received evenly over its useful life?

Where an entity acquires a bundle of assets and the total cost of the assets is greater than the sum of the fair values of the assets acquired, a bargain purchase has been made.

Under AASB 116 Property, Plant and Equipment, the revaluation model is applied to:

When changing from the revaluation to the cost model of measurement for non-current assets, the model must be applied:

Which of the following are not examples of directly attributable costs that should be included in the cost of acquisition for property, plant and equipment?

Once an entity has selected a depreciation method to use to depreciate an asset, it must use that same method for the entire useful life of the asset.

Which of the following is the appropriate journal entry to recognise depreciation expense calculated using the diminishing balance method?

Hoffman Limited acquired a bundle of assets for a cash consideration of $400 000. The fair values of the assets on date of acquisition were as follows: machinery $264 000, motor vehicles $176 000. Which of the following is the appropriate journal entry to record this acquisition?

Under AASB 116 Property, Plant and Equipment, subsequent to initial recognition property, plant and equipment assets can only be measured using the revaluation model.

An entity acquired an item of plant in exchange for an item of equipment. The equipment has a carrying amount of $15 000 and a fair value of $20 000. The journal entry to record the acquisition of the plant will show:

Copely Limited had an existing asset revaluation surplus in respect to an item of plant that had been derecognised. An appropriate journal entry to transfer the surplus to retained earnings would include which of the following?

One of the reasons for selecting the cost model over the revaluation model is because of the increased relevance of such measures.

For the purposes of recognising an item of property, plant and equipment, the acquisition date is defined in AASB 3 Business Combination as the date:

Costs of training staff in the use of a new asset are capitalised into the initial cost of the asset under AASB 116 Property, Plant and Equipment.

A revaluation increment reversing a previous revaluation decrement must be credited to the profit or loss.

Depreciation is not recognised if an asset's residual value exceeds its carrying amount.

When a property, plant and equipment asset is derecognised through sale, any associated asset revaluation surplus must always be transferred to retained earnings.