QUESTION 2

1.Under IFRS regarding impairment of property, plant and equipment the "value in use" is the asset's discounted net present value of expected future cash flows from the use and disposal of the asset.

True

False

QUESTION 3

1.Under IFRS, component depreciation is not permitted.

True

False

QUESTION 4

1.Under IFRS, a company must depreciate separately each part of an item of PP&E with a cost that is significant in relation to the total cost of the item.

True

False

QUESTION 5

1.Under US GAAP undiscounted cash flow is used to test for impairment.

True

False

QUESTION 6

1.When an asset is revalued, the entire class of PP&E to which that asset belongs must be revalued.

True

False

QUESTION 7

1.Both IFRS and US GAAP prohibit the reversal of impairment losses on goodwill.

True

False

QUESTION 8

1.Under IFRS, a company using the Revaluation Model can postpone revaluing an asset that has increased in value as long as it is prior to (before) the next required revaluation date.

True

False

QUESTION 9

1.ABC Company uses IFRS for financial reporting and revalues its buildings in accordance with IFRS.

On January 1, 2009, ABC Company paid cash of $4,400,000 to acquire its only building.

The company uses straight line depreciation and the building has a 20-year life and no salvage value.

On December 31, 2010, the company revalued the building when the fair value of the building was $4,158,000

On December 31, 2012, the company sold the building for $3,970,000

The company's accounting policy is to reverse a portion of revaluation surplus related to any increased depreciation expense.

The balance in Depreciation Expense and Accumulated Depreciation - Building accounts after depreciation expense is recorded for December 31, 2010 but before the revaluation is recorded would be:

a.

Depreciation Expense220,000

Accumulated Depreciation - Buildingzero

b.

Depreciation Expense220,000

Accumulated Depreciation - Building440,000

c.

Depreciation Expense440,000

Accumulated Depreciation - Building220,000

d.

Both accounts would be zero

QUESTION 10

1.ABC Company acquired a new piece of land on April 1, 2010 for cash of $200,000.ABC Company reports under IFRS and revalues its land.On December 31, 2015, the fair value of the land is $120,000.On December 31, 2018, the fair value of the land is $350,000.

What is the journal entry on April 1, 2010?

a.

Land200,000

Cash200,000

b.

Land200,000

Investment in Land200,000

c.

Land200,000

Revaluation Surplus200,000

d.

Cash200,000

Land200,000

e.

None of these