1:38 Tutorial Questions for Week 11 [PPE & IA] * 27% 1. Explain what assets constitute the property, plant and equipment as per IAS16. 2. Discuss the recognition criteria for property, plant and equipment as per IAS16. 3. Discuss the conditions under which property, plant and equipment can be derecognized as per IAS16. 4. Explain the key characteristics of an intangible asset. 5. How does the principles for amortisation of intangible assets differ from those for depreciation of property, plant and equipment? 6. Explain difference between research and development 7. Atlas Ltd has acquired a new machine, which it has had installed in its factory. The following costs has been incurred in the process. Discuss which of the following costs should be capitalized into the cost of the building. (a) Labour and travel costs for managers to inspect possible new machines and for negotiating for a new machine (b) Freight costs and insurance to get the new machine to the factory (c) Costs for renovating a section of the factory in anticipation of the new machine's arrival to ensure that all the other parts of the factory will have easy access to the new machine (d) Cost of cooling equipment to assist in the efficient operation of the new machine (e) Costs of repairing the factory door, which was damaged by the installation of the new machine (f) Training costs of workers who will use the machine 8. Revaluation od assets: On 30th June 20X1, the statement of financial position of Uranus Ltd showed the following non- current assets after charging depreciation: Building $ 300 000 Accumulated depreciation (100 000) $200 000 Motor Vehicle 120 000 80 000 Accumulated depreciation (40 000) The company has adopted fair value for the valuation of non-current assets. This has resulted in the recognition in previous periods of an asset revaluation reserve for the building of $14 000. On 30 June 20X1, an independent value assessed the fair value of the building to be $160 000 and the vehicle to be $90 0000. The income tax rate is 30%. Required: 1. Prepare the necessary entries t revalue the building and the vehicle as at 30 June 20X1. 2. Assume that building and vehicle had remaining useful lives of 25 years and 4 years respectively, with zero residual value. Prepare entries to record depreciation expense for the year ended 30 June 20X2 using the SLM. 9. Case study: Research & Development: 10.3 RESEARCH AND DEVELOPMENT Batura Laboratories Lad manufactures and distributes a wide range of general pharmaceutical products. Selected audited data for the reporting period ended 31 December 2010 are as follows: Gross profit $17 600 000