...Objective The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are: the timing of recognition of asset; the determination of their carrying amounts; and The depreciation charges to be recognized. Scope IAS-16 applied to all Property, Plant & Equipment until and unless any other standard requires or permits a different accounting treatment. Definition Property, Plant & Equipment are tangible items that: are held for use in the production or supply of goods or services; for rental to others; for administrative purposes; and are expected to be used during more than one period. Recognition The cost of an item or Property, Plant & Equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity; and The cost of the item can be measured reliably. Measurement at Recognition An item of Property, Plant & Equipment that qualifies for recognition as an asset shall be measured at its cost. Elements of Cost Purchase price + (Import duties + Non refundable taxes) - (Trade Discounts + Rebates) Directly attributable costs. Initial estimate of the cost of dismantling and removing the item and restoring the site in which it is located. Costs that are not Costs of Property, Plant & Equipment Costs of opening new facility; Costs of introducing new product or service; Costs of conducting business in new location or with...
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...Property, plant and equipment |Level |[pic] |Typical coverage of US GAAP: | |US GAAP |Replace slides 2 and|Definition | | |3 with your own |Acquisition of PP&E: | | |material here, or |General | | |throughout as |Self-constructed assets | | |desired |Interest costs during construction | | | |Initial cost of natural resources | | | |Valuation at acquisition: | | | |Exchange of non-monetary assets | | | |Lump-sum purchases | | ...
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...The rules of life Rules for you: 1. Keep it under your hat. (no one likes a smart ass). DON’T PREA CH, PROPA G ATE, OR EVEN MENTION THIS. 2. WISDOM ISN’T ABOUT NO T MAKING MISTAKES BUT ABOUT LEARNING T O ESC APE AFTERW ARD WITH OUR DIGNITY AND SANITY INTA C T. learn to forgive yourself for the mistakes you made, and look out for new ones. Learn from your mistakes. 3. Accept What Is Done Is Done, keep moving on with your life. 4. Accept Yourself. YO U D O N ’ T H A V E T O IMPRO VE OR CHANGE OR STRIVE F OR PERFEC TION. QUITE THE OPPOSITE. JUST A CCEP T. 5. Know What Counts and What Doesn’t. THERE ARE SOME THINGS IN THIS LIFE THAT ARE IMPORTANT AND A WHOLE LO T O F T H I N G S T H AT AREN’ T. 6. dedicate your life to something. IT’S A Y ARDSTICK TO M E A S U R E (A) HO W I’M DOING, (B) WHAT I’M DOING, AND (C) WHERE I’M GOING. To be happy for family and God. 7. Be Flexible in Your Thinking. TRY T O SEE LIFE NO T AS THE ENEMY, BUT AS A FRIEND LY SPARRING PA R T N E R . be adventurous. Don’t be in a rut. 8. Take an Interest in the Outside World. TA K I N G A N I N T E R E S T I N THE OUTSIDE W ORLD IS ABOUT DEVEL OPING Y OU, RATHER THAN F OR THE WO R L D ’ S B E N E F I T. makes you an interesting person. Keeps u young. 9. Be on the Side of the Angels, Not the Beasts. WE GET T ORN BETWEEN WHAT WE W ANT AND WHAT IS GOOD F O R OT H E R S . 10. Only Dead Fish Swim with the Stream. AND THAT’S WHAT LIFE IS, WHAT IT IS MEANT T O BE: A...
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...ACCG 224 Report: Fairfax Media Limited 28th April 2014 (4pm) Juhi Agarwal Student Number: 42462843 Tutorial Class: Thomas Kern – Thursday 5pm-7pm Word Count: 2183 Contents: Executive Summary………………………………………………………………………….3 1. Introduction………………………………………………………………………………..3 2. Body……………………………………………………………………………………..…... 2.1 – A – Objective of GPFR and qualitative characteristics..……………….…….3, 4 2.2 – B – Disclosure requirements for PPE as per AASB116…...…………………….5 2.3 – C – Extent disclosure on PPE satisfy fundamental characteristics…………….6 2.4 – D – Extent disclosure on PPE align with the objective of GPFR……………..7,8 3. Conclusions and Recommendation…..…………………………………………………7,8 4. References………………………………………………………………………...………..9 5. Appendix……………………………………………………………………………….10,11 Executive Summary: The Board of Directors of Fairfax Media Limited discussed the importance of ensuring that this years financial reports should meet the objective of general purpose financial reporting and along with that the qualitative characteristics as outlined in the 2010 Conceptual Framework. The aim is to examine Fairfax Media Limited’s 2013 Annual Report and how the relevant disclosures in the company’s report concerning to PPE align with the Conceptual Framework’s objectives and qualitative characteristics. Introduction: Fairfax Media Limited is a prominent multi-platform media company throughout Australasia. The Fairfax Media...
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...Case Analysis- Inventory or Property Plant and Equipment Overview and Introduction Red Hen Company, which operates for producing and processing and selling fresh eggs. After its first year, it began to prepare financial statements. However, the accountancy found it’s hard to identify these egg-producing flocks as inventory or as property, plant and equipment. This essay will cite accounting standards and rules from FASB, identifying the definitions related to inventory and fixed asset, and discuss the related details in company’s specific situation. Finally, the essay will provide recommendations on how to present the hens in the financial statement, and draw a conclusion based on the previous recommendations. Identification Based on Accounting Principles and Specific Situation When preparing financial statements at the end of its first operating years, Red Hen Company has to identify the classification of its egg-laying flocks. Whether the items should appear in the inventory section under the current asset, or be treated as fixed asset? Admittedly, the egg-laying flocks can be identified as fixed asset (Property, plant, and equipment), which used to create and distribute an entity’s products and services [FASB ASC 360-10-05]. Specifically, egg-laying flocks could be treated as equipment. [FASB ASC 905-360-25-4] points out “except for animals with short productive lives classified as inventory, breeding animals, livestock (which includes cattle, hogs, sheep, and goats)...
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...The Economic Substance of Accounting Treatment of Property, Plant and Equipment Related IASs and Faithful Representation April 03, 2010 Introduction Theoretical principles of conceptual framework help determine which events should take place and when. They aid professionals with development of new standards and principles. The users of financial statements of public companies depend on the faithful representation of the entity’s financial statements. The financial statements must be adjusted on a regular basis to reflect economic substance of their information, as the users need these amounts to faithfully represent the account balances as an indicator of a company’s future earning power. As IFRS is introduced into Canadian practice in 2001, companies will be required to focus on which methods will emphasize economic substance with the changes in accounting policies. In the following discussion, we will focus one aspect of the conceptual framework around IFRS, in particular, economic substance, as it relates to the application of IFRS in reporting Property Plant and Equipment (PPE.) Recognition of PPE to Reflect Economic Substance Changes to the recognition of property, plant, and equipment Among the most significant changes are the options of accounting policy regarding the ongoing valuation of an asset on a class by class basis. Under GAAP, the cost model was the only choice; IFRS provides two options, the cost model or the revaluation model. These options are...
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...Chapter 13 Auditing the Inventory Management Process Answer Key True / False Questions 1. The "cradle-to-grave" cycle for inventory begins when goods are purchased and stored and ends when the finished goods are shipped to customers. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 Develop an understanding of the inventory management process. Topic: Overview of Inventory Management Process 2. A receiving report records the shipment of goods to customers. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-02 Be able to identify and describe the types of documents and records used in the inventory management process. Topic: Types of Documents and Records 3. Sale of finished goods is a part of the inventory management process. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-03 Understand the functions in the inventory management process. Topic: The Major Functions 4. Once the controls in the inventory system have been tested, the auditor sets the level of control risk. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Risk Analysis Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-06 Know how to assess control risk for the inventory system. Topic: Control Risk...
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...by the company. • All assets are property of a company and are recorded in the balance sheet. Not all inputs are also assets! • In economics: we talk about physical production and inputs inputs are typically capital and labour, by capital we mean “physical” capital (property, plant, equipment) and not “financial” capital (equity). • In accounting: we talk about property and assetscapital (equity!!)is one of the sources of financing The difference between inputs and assets: - rented offices (input, but not asset – the rent is in IS, nothing in BS ) - rights (patents, licenses, claims – assets, but not inputs) - labour (input, but not asset – the cost of labour is in IS, nothing in BS) - services (input, but not asset – the cost of services is in IS, nothing in BS) 1 ASSETS Two major components of assets are: 1. FIXED ASSETS (more than one year in a company) - Tangible assets that have a long-term usefulness (property, plant & equipment) - Intangible assets with long-term value (patents etc.) 2. CURRENT ASSETS (up to one year in a company) - Inventories of raw material, work in progress and finished goods - Accounts receivable are claims against customers for products sold - Cash - Trading securities ASSETS Balance Sheet Shows property (Assets) and how this property is financed (Liabilities). Simplified scheme: Assets Liabilities + Equity A. Fixed assets - property, plant & equipment - intangible assets (patents etc.) ...
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...converted into cash, is an asset. Assets equal the sum of total resources for that particular business as opposed to liabilities. A few examples are office equipment, vehicles, cash, real estate, and other property owned by the business. In a business accounting point of view, there are different types of assets used, such as current, long-term, intangibles, property, plant, and equipment. This list is basically items that hold cash value, which bring in income to the business. Current assets are important to most companies as a source of funds for day-to-day operations. This asset considered as work in process or cash that’s always flowing in and out of the business. A balance sheet item which equals the sum of cash and cash, accounts receivable, inventory, marketable, prepaid expenses, and other assets that could be converted to cash in less than one year. Creditors of a company, will often be interested in how much that company has in current assets, so that if the company goes bankrupt; the creditors can use their assets to pay for their debt. In addition, current assets are important to most companies as a source of funds for day-to-day operations. On the other hand noncurrent assets are not to be turned into cash or be consumed within one year of the balance sheet date. Long – term assets are a value of property, equipment, and other capital assets minus the depreciation, and have a...
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...Core 1 – Week 1 Immersive Case Exhibit – Modern Design Co. To: Asha From: CPA Date: January 10, 2015 Subject: Modern Design Co. (MD) The following are explanations of the accounting issues as well as the analysis and recommendation to resolve the issue. Also included are the adjustments to the financial statements (Appendix A). Barbor sofa order Issue On December 11, MD received an order for a total price of $22,100. Barbor Furniture Ltd. (Barbor) provided a deposit of $9,000 which was recorded as revenue when it was received on December 13. Barbor was not billed until January 2. The order was not shipped until after the year end on January 2. The remaining balance owing was recorded in accounts receivable and sales. The inventory was excluded from the ending inventory count as well. The issue is whether this is the appropriate time to record the revenue or if another time is more appropriate. The other issue is that the balance owing is not a receivable until the product has left the warehouse. The cost of the sofas should also be included in inventory. Analysis According to ASPE 3400, revenue cannot be recognized until: 1. The seller of the goods has transferred to the buyer the significant risks and rewards of ownership, in that all significant acts have been completed and the seller retains no continuing managerial involvement in, or effective control of, the goods transferred to a degree usually associated with ownership. Not met:...
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...suppliers is cash flow Set 2: ___B__ Accounts receivable, ending balance ___B__ Cash received from customers ____I_ Sales Difference: Accounts receivable is money owed to a company by its debtors, cash received is cash flow Set 3: ___I__ Wage expense for the period __B__ Wages payable, ending balance _B____ Cash paid for wages during the period Difference: Wage expense is compensation earned by employees, wages payable is money not yet earned for work already completed. Set 4: ___B__ Property, plant, and equipment, ending balance __CF__ Cash paid for property, plant, and equipment during the period ___B__ Cash received from selling property, plant, and equipment during the period ____I_ Depreciation expense during the period (expense of using property, plant, and equipment during the period) Difference: Property, plant and equipment are assets that depreciate; cash paid for property plant and equipment concerns the cash flow; cash received from selling property is cash flow; depreciation is an allocated and expected loss. Set 5: ____B_ Notes payable, ending balance ____B_ Cash received from...
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...University of Phoenix Running head: Response to Client Request I 2 An arrangement that qualifies as a lease is an arrangement that conveys the right to use property, plant, or equipment if the arrangement conveys to the purchaser (lessee) the right to control the use of the underlying property, plant or equipment. The right control the use of the underlying property, plant, or equipment is conveyed if any of the following conditions is met: A. The purchaser has the ability or right to operate the property, plant, or equipment in a manner it determines while obtaining or controlling more than a minor amount of the output or other utility of the property, plant, or equipment. B. The purchaser has the ability or right to control physical access to the underlying property, plant, or equipment while obtaining or controlling more than a minor amount of the output or other utility of the property, plant, or equipment. C. Facts and circumstances indicate that it is remote that one or more parties other than the purchaser will take more than a minor amount of the output or other utility that will be produced or generated by the property, plant, or equipment during the term of the arrangement, and the price that the purchaser will pay for the output is neither contractually fixed per unit of output nor equal to the current market price per unit of output as of the time of delivery of the output...
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...for companies to inflate or write down the value of PP&E by managers. Therefore, the investors have to pay attention to the policy of the PP&E and in this memo we tend to analyze the account deeply and understand how to the amount is reported on financial statement. In order to find the differences between IFRS and U.S GAAP on this subject, summaries of the requirements of GAAP and IFRS separately will lay a foundation for the comparison. IFRS: IAS 16 An entity may choose 2 accounting models for its property plant and equipment: an entity shall apply the same model to the entire class of PP&E (IAS 16-29: An entity shall choose either the cost model in paragraph 30 or the revaluation model in paragraph 31 as its accounting policy and shall apply that policy to an entire class [Refer: paragraph 37] of property, plant and equipment.) 1. Cost model (IAS 16-30: After recognition [Refer: paragraph 7] as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation [Refer: paragraphs 6 (definition of depreciation) and 43–62] and any accumulated impairment losses [Refer: paragraph 63]) An entity shall carry an asset at its cost less any accumulated depreciation and...
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...“Valuing tangible non-current assets is subjective and complex and can therefore result in different companies valuing similar assets very differently” Financial reporting attempts to measure the worth of assets, a concept that is inherently subjective and arbitrary. We can never know the true value of an asset, and rather than being an objective truth, valuations are always biased. Financial reporting is used for different purposes by different users and so each different way might be appropriate in different circumstances and values are affected by the purpose of measurement. Property, plant and equipment are the main non-current assets that a company holds. Similar assets can be valued differently in different companies due to several different factors which I will discuss in this essay. Tangible non-current assets are usually valued by using the historical cost, which is the initial cost of acquiring the asset to the company. The IFRS states that the historical cost of an item not only includes the price paid for it, but also “any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.” This includes transportation and labour costs, and the cost of site preparation. Different companies may have different views on whether costs involved in bringing the asset into use should be counted as part of the asset or an expense, and often small costs that should be capitalised...
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...Number: GPMP12 Document Title: DRAFT Property Management Plan Revision No. | Date | 0 | 10/1/2012 | Submitted By: Analytical Services, Inc. (ASI) 350 Voyager Way Huntsville, AL 35806 This document includes data that shall not be disclosed outside the Government and shall not be duplicated, used, or disclosed—in whole or in part—for any purpose other than contract execution. The Government shall have the right to duplicate, use, or disclose the data to the extent provided in the contract. This restriction does not limit the Government's right to use information contained in this data if it is obtained from another source without restriction. Table of Contents Government Property Management Plan Signature Page………………………………………... 4 Revision History………………………………………………………………………………….. 5 Government Property Management Plan…………………………………………………………. 6 1.0 Property Management..…………………………………………………………………… 6 1.1 Management and Applicability....………………………………………………………… 6 1.1.1 Distribution.……………………………...……………………………………………….. 6 1.1.2 Operations Manager (OM) Responsibilities..……..……………………………………… 6 1.1.3 OSAC COMMSS PSA/Property Custodian Responsibilities……..……………………… 7 1.1.4 Employee Responsibilities..……….……………………………………………………… 7 1.1.5 Meetings and Training.…………………………………………………………………… 7 1.2 Reporting of Loss, Damage, and Distribution of Property..……………………………… 7 1.2.1 Installation Accountable Government Property.………………………………………….. 8 1.2.2 Contractor...
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