ACCA CERTIPSAS 2

With regards to impairment of assets, the term recoverable amount refers to;

An impairment loss is whereby.

Which costs should not be capitalised for self constructed assets?

Intangible assets with a definite life must be armortised over their useful life

Inventories are recognised at;

For non cash generating assets, the value in use is represented by;

An entity enters into an operating lease on the following terms:
Lease term is 4 years
Two instalments of 10m payable at the start of the first and final years.
Required:
What is the expense recognised

Internally generated intangible assets are always recognised in the statement of financial position

A regional authority enters into an operating lease agreement on 1 July 2012. The lease term is 5 years. Annual rental payments in advance are $1,500. To incentivize the authority to enter into the lease, the lessor has agreed to a six month rent free period, so the first rental will be made on 1 January 2013. What should be recognised in the statement of financial performance for the year ended 31 December 2012?

In the fair value model under investment property, any gains and losses on fair value changes are recognised in equity.

Under finance leases, the lessee recognises the instalments paid as an expense on a straight line basis

Revaluation gains are credited to a revaluation reserve (equity) and only recognised in the statement of financial performance if they are reversing a prior year loss previously recognised in the statement of financial performance.

The government of sweden is in the process of preparing year end accounts and have the following information regarding a project to build a bridge:
Costs to date 5m
Estimated costs to complete 3m
Contract price 7m
The project is accounted for under IPSAS 11. What should be recorded through surplus/deficit for revenue and overall result for this project at the year end?

Subsequent measurement of property plant and equipment per IPSAS 17 has two allowed alternative models;

The net book value refers to the initial carrying amount minus depreciation for the period

During the year, a municipality constructed a new office block building costing 3m. It took 6 months to complete and the work was funded from existing loan finance:
$1m loan at an interest rate of 6%
$1.5m loan at an interest rate of 4%
$0.5m loan at an interest rate of 5%

Under IPSAS, what borrowing costs should be capitalised?

A regional hospital is developing a new technology which if successful, would improve the efficiency of surgery.
Project work began on 1 Feb 2012. By 31 July 2012, they had produced a prototype and by 30 September 2012 they had completed a rigorous testing process to check the product conformed to safety requirements etc. They launched the product into the market on 1 December 2012. Costs incurred on the project were:
Feb 450, March 450, April 450, May 500, June 550, July 450, August 600, September 650, October 200, November 100.

How much, if any of the expenditure should be capitalised in the year ended 31 December 2012?

Intangible assets may be revalued only if there is an active market with many buyers and sellers and publicly available prices.

A local authority owns five properties. It wishes to only revalue two of the properties and maintain the others at cost. This is correct per the standards.

Cost of an asset 100m
Residual value 20m
Useful life 4 years
Required: Compute depreciation for year 1

IPSAS 17 stipulates that Heritage Assets MUST be recognised in the financial statements.

Non current assets held for sale are those which are expected to be sold before 12 months after the reporting date. Which of the following are not indicators that the sale will be completed within 12 months?

A government agency that provides services for people with sports injuries has decided to rent out some facilities they are not using, for two years to a company named Partition Ltd. The rent is 5,000 per month. Which of the following is true?

A government agency makes a sale of software for $500,000 at the end of its current reporting period to a local authority. The amount charged to the local authority includes $470,000 for software and $30,000 for support services for the next two years. How much revenue should be recognised in the current reporting period?

How is the impairment loss on a cash generating unit allocated?