Initial Measurement

FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

Question

The objectives of IAS 16 are to prescribe the accounting treatment of property, plant, and equipment (PPE).

Required:
Explain how initial costs of property, plant, and equipment (PPE) should be measured and state the circumstances in which subsequent expenditure on non-current assets should be capitalized.

Answer

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Tags: Capitalization, IAS 16, Initial Measurement, PPE, Subsequent Expenditure
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

Question

Which of the following costs should NOT be included in the initial measurement of property, plant and equipment?
A. Purchase price
B. Site preparation cost
C. Professional fees
D. Installation cost
E. Site administration and general overhead costs

Answer

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Tags: Accounting principles, Initial Measurement, Plant and Equipment, Property
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2015

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

Question

Caleb Limited has recently purchased a motor vehicle for its business operations. The company incurred various costs in acquiring, preparing, and operating the motor vehicle. The following information is available:

Purchase price of motor vehicle – ₦5,000,000
Annual insurance premium – ₦120,000
Transportation costs to the company’s location – ₦50,000
Installation costs for specialized equipment – ₦150,000
License and registration fees – ₦80,000
Fuel and maintenance expenses (for the first month of operation) – ₦70,000
Legal fees for acquisition – ₦100,000

Required:
Calculate the initial measurement of the motor vehicle.

Answer

Find Related Questions by Tags, levels, etc.

Tags: IAS 16, Initial Measurement, Plant and Equipment, Property
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2023

FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

Question

The objectives of IAS 16 are to prescribe the accounting treatment of property, plant, and equipment (PPE).

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capitalization, IAS 16, Initial Measurement, PPE, Subsequent Expenditure
Level: Level 2

Topic: Property, Plant, and Equipment (IAS 16)
Series: MAY 2019

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting principles, Initial Measurement, Plant and Equipment, Property
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2015

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

Question

Purchase price of motor vehicle – ₦5,000,000
Annual insurance premium – ₦120,000
Transportation costs to the company’s location – ₦50,000
Installation costs for specialized equipment – ₦150,000
License and registration fees – ₦80,000
Fuel and maintenance expenses (for the first month of operation) – ₦70,000
Legal fees for acquisition – ₦100,000

Required:
Calculate the initial measurement of the motor vehicle.

Answer

Find Related Questions by Tags, levels, etc.

Tags: IAS 16, Initial Measurement, Plant and Equipment, Property
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2023

Question Tag: Initial Measurement

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FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

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FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

You're reporting an error for "FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)"

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

You're reporting an error for "FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)"

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)"

FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)

Explanation of how initial costs of PPE should be measured and when subsequent expenditure should be capitalized under IAS 16.

You're reporting an error for "FR – May 2019 – L2 – Q4a – Property, Plant, and Equipment (IAS 16)"

FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)

This question identifies which cost should not be included in the initial measurement of property, plant, and equipment.

You're reporting an error for "FA – Nov 2015 – L1 – SA – Q19 – Accounting for Property, Plant, and Equipment (IAS 16)"

FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the initial measurement of a motor vehicle for a business.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q4B – Accounting for Property, Plant, and Equipment (IAS 16)"

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