Exam 18: Property, Plant Equipment

A non-current property, plant and equipment asset is depreciated using the straight-line method over a 10-year useful life. The asset was revalued upwards after four years of use. There is no change in the remaining useful life of six years or to the residual value. Which of the following relationships reflects the effect of the revaluation on the future depreciation of the asset? Depreciation Rate   Annual depreciation expense

After an asset has been initially recognised, an entity has a choice between the cost model and the:

When using the revaluation model:

Depreciation is an accounting process which involves a systematic allocation of the depreciable amount of an asset over its useful life.

Property, plant and equipment includes items that are:

Disclosures under AASB 116 Property, Plant and Equipment are required on an asset-by-asset basis where the revaluation model has been used.

The revaluation model must be applied to classes of assets.

Expenditure designed to improve the quality of the output of an asset are capitalised into the cost of the asset in accordance with paragraph 7 of AASB 116 Property, Plant and Equipment.

Webcke Limited acquired an item of machinery with an expected useful life of 4 years. The expected total production output over this period was: year 1, 30 000 units; year 2, 25 000 units; year 3, 15 000 units; year 4, 10 000 units. The machinery cost $85 000 and the residual value is $15 000. The amount of depreciation expense recorded in the first year is:

On 1 July 2009, Barba Limited acquired an item of equipment for $105 000 which it depreciated using the straight-line basis. The equipment had an estimated useful life of 10 years and its residual value was $15 000. The carrying amount of the equipment in the financial statements dated 30 June 2014 is: