Question Tag: Plant

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 20 Marks

AAA – May 2024 – L3 – SB – Q2 – Overview of Advanced Audit and Assurance

Discuss audit review types, include necessary IAS 16 and IAS 36 information in the audit checklist, and advise on misclassified asset treatment.

The statement below is an extract of property, plant and equipment from the “notes to the financial statements” of ABC Plc:

Land and buildings Plant, equipment, fixtures and fittings, and motor vehicles Total
Costs (₦)
At January 1, 2020 75,230,481 120,454,850 195,685,331
Additions 12,540,000 16,000,500 28,540,500
Acquisitions through business combinations 24,400,000 35,750,430 60,150,430
Classified as held for sale (10,200,450) (15,450,600) (25,651,050)
Disposals (5,000,465) (10,700,250) (15,700,715)
At December 31, 2020 96,969,566 146,054,930 243,024,496
Accumulated depreciation and impairment losses
At January 1, 2020 46,660,254 66,675,860 113,336,114
Depreciation charge for the year 5,594,523 17,220,518 22,815,041
Classified as held for sale (7,650,338) (9,270,000) (16,920,338)
Disposals (3,762,523) (9,034,069) (12,796,592)
Impairment losses 5,267,533 6,022,713 11,290,246
Reversal of Impairment losses (4,515,028) (4,818,170) (9,333,198)
At December 31, 2020 41,594,421 66,796,852 108,391,273

Net carrying amount
At December 31, 2020: ₦55,375,145 (Land and buildings), ₦79,258,078 (Plant, equipment, fixtures, and fittings, and motor vehicles), Total: ₦134,633,223
At December 31, 2019: ₦28,590,212 (Land and buildings), ₦53,778,390 (Plant, equipment, fixtures, and fittings, and motor vehicles), Total: ₦82,368,602

The above was the situation of the statement of financial position of the company when it was signed at the board of directors meeting. During further review to sign off the audit file, it was discovered that the classification of some of the assets as impaired was due to wrong classification and the value had actually increased due to a new road network in the location. This affected the impairment losses for the year. The new value of the buildings affected and shown in the note above as available from market survey had actually grown to ₦8.5 million within the period under review.

Required:

  1. Evaluate the different types of audit review, the purposes, and the scope of the reviews. (10 Marks)
  2. Discuss the necessary information to be included in the audit checklist based on the information above in relation to IAS 16 – Property, Plant, and Equipment and IAS 36 – Impairment of Assets. (7 Marks)
  3. Advise on the treatment of the issue raised with regard to the wrongly classified assets. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – May 2024 – L3 – SB – Q2 – Overview of Advanced Audit and Assurance"

  • 8 Marks

FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)

Explain reclassification criteria for transferring investment property to PPE.

a. If a property is transferred into or out of the category of property, plant and equipment (PPE), it might be reclassified as investment property or as no longer an investment property.

A transfer of investment property can only be made where there is a change of use of such property.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q3a – Property, Plant, and Equipment (IAS 16)"

  • 5 Marks

FR – Nov 2021 – L2 – Q7b – Property, Plant, and Equipment (IAS 16)

Explain the two methods of valuation for property, plant, and equipment as per IAS 16.

AS 16 prescribes the principles and models of the valuation in recognizing items of property, plant, and equipment in the financial statements of an entity.

Required:
Briefly explain the TWO methods of valuation recognized in IAS 16 – property, plant, and equipment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2021 – L2 – Q7b – Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q9 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Identifying what does not lead to improvement of property, plant, and equipment.

Which of these may NOT lead to improvement in respect of Property, Plant and Equipment?

A. Extension of economic life of the asset
B. Repairs and maintenance of asset
C. Increased quality of output
D. Faster production
E. Reduced operating costs

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q9 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)

Understanding the term for a new value resulting from revaluation under IAS 16.

According to IAS 16 (Property, Plant, and Equipment), the new value as a result of a revaluation exercise carried out on property, plant, and equipment, within the context of the historical cost system is called ____________.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2013 – L1 – SA – Q25 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 3 Marks

FR – May 2018 – L2 – Q7c – Property, Plant, and Equipment (IAS 16)

Calculate the gain or loss on the disposal of an old equipment traded in for a new one, in accordance with IAS 16.

Odeda Limited operates its business with plant and equipment that qualified under IAS 16 as property, plant, and equipment. On January 1, 2016, the cost of the company’s plant was N4,000,000, and the accumulated depreciation was N1,600,000. On January 2, 2016, the company bought a new equipment at the cost of N1,000,000, and the equipment supplier accepted an old equipment owned by Odeda Limited in part exchange for a value of N80,000. The equipment originally cost N600,000, and its accumulated depreciation is N500,000.

You are required to calculate the gain or loss on the disposal of the old equipment.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2018 – L2 – Q7c – Property, Plant, and Equipment (IAS 16)"

  • 7 Marks

FR – May 2018 – L2 – Q7b – Impairment of Assets (IAS 36)

Explain the process of identifying and accounting for impairment of property, plant, and equipment under IAS 36.

As the accounting officer in charge of your company’s property, plant, and equipment (PPE), draft a memo to the chief accountant explaining how impairment of PPE should be identified and accounted for by your company in accordance with IAS 36.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2018 – L2 – Q7b – Impairment of Assets (IAS 36)"

  • 5 Marks

FR – May 2018 – L2 – Q7a – Property, Plant, and Equipment (IAS 16)

Outline the disclosure requirements for property, plant, and equipment in financial statements according to IAS 16.

Explain the disclosure requirements in published financial statements with respect to property, plant, and equipment in accordance with IAS 16.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2018 – L2 – Q7a – Property, Plant, and Equipment (IAS 16)"

  • 10 Marks

FA – Nov 2021 – L1 – SB – Q6a – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires the disclosure requirements under IAS 16 for Property, Plant, and Equipment

IAS 16 – Property, Plant, and Equipment requires an entity to make certain disclosures in the financial statements for each major class of property, plant, and equipment.

Required:
State FIVE of the disclosures required under IAS 16. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q6a – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 4 Marks

FA – May 2022 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)

List general requirements of IAS 16 related to the depreciation of Property, Plant, and Equipment.

List FOUR general requirements of IAS 16 – Property, Plant, and Equipment, as regards depreciation.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2022 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – May 2022 – L1 – SA – Q4 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Calculate the amount of depreciation charged for the year after adjusting the useful life of an asset.

What is the amount of depreciation charged in 2018 after adjusting the useful life of the plant as described in Q3?

A. ₦30,000
B. ₦52,500
C. ₦60,000
D. ₦67,500
E. ₦80,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2022 – L1 – SA – Q4 – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 5 Marks

FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question asks for the calculation of depreciation on revalued property and adjustments to account for revaluation gains and losses.

Explain how revaluation of property, plant and equipment affects the calculation of depreciation and the adjustments to revaluation surplus or deficit.
(5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q6c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

  • 1 Marks

FA – Nov 2014 – L1 – SA – Q13 – Accounting for Property, Plant, and Equipment (IAS 16)

Calculating the amount to be capitalized as cost of property, plant, and equipment.

Given the following information:

  • Cost of property, plant and equipment: N5,000,000
  • Administrative and general overhead: N750,000
  • Installation cost of property, plant & equipment: N500,000
  • Cost of entertainment: N150,000

What amount should be capitalized as cost of property, plant, and equipment?

A. N5,500,000
B. N6,250,000
C. N6,400,000
D. N6,700,000
E. N6,900,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2014 – L1 – SA – Q13 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 1 Marks

FA – May 2023 – L1 – SA – Q8 – Accounting for Property, Plant, and Equipment (IAS 16)

Identifying when depreciation on property, plant, and equipment starts according to IAS 16.

When is depreciation on property, plant and equipment required to start in accordance with IAS 16?

A. At the date the asset was purchased

B. When payment to the vendor is completed

C. When the assets are put to use by the management

D. When the assets are available for use

E. After employees are trained on the use of the assets

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SA – Q8 – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 12 Marks

FA – May 2017 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)

Calculate the value of Land & Building, Plant & Machinery, and Motor Vehicle based on given transactions.

a. The following transactions are extracts from the records of Votle Limited in 2016, the year of commencement of its business operations.

Date Transaction Description Amount (₦’000)
1 January Cost of land acquisition brought forward 7,500
1 January Building construction work in progress brought forward 9,675
10 January Invoice price of imported machinery received 13,000
10 January Agency fees for land acquisition paid 750
12 January Discount on purchase of machinery (400)
12 January Freight and insurance of machinery 300
12 January Import duties on machinery paid 630
15 January Cost of additional construction materials used paid 3,550
21 January Legal fees for land acquisition agreement paid 350
25 January Clearing agent’s fees for machinery paid 315
31 January Initial ground rent for land paid 600
2 February Annual ground rent for land paid 250
7 February Cost of fairly used motor vehicle paid 3,750
14 February Cost of haulage of machinery 252
14 February Cost of major repair to bring the motor vehicle into a usable condition 1,550
22 February Cost of construction of platform for machinery paid 1,050
25 February Cost of labour used in construction of building paid 1,975
28 February Architect’s fees in respect of building construction paid 1,250
4 March Cost of connection of power and water to machinery 1,450
6 March Repair and maintenance of motor vehicle 250
10 March Cost of testing the machinery 603
15 March Cost of commissioning the building 950

Required:
Determine the value of the following non-current assets brought into use as at March 15, 2016.
i. Land and Building (4 Marks)
ii. Plant and Machinery (4 Marks)
iii. Motor Vehicle (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2017 – L1 – SB – Q2a – Accounting for Property, Plant, and Equipment (IAS 16)"

  • 3 Marks

AA – Dec 2022 – L2 – Q5c – Audit and Assurance Evidence

Explains three assertions relevant to the audit of tangible non-current assets.

You were recently appointed by Danso & Co Chartered Accountants. You were part of the team that audited a construction company with a huge asset base. Your Manager reviewed your file and raised questions that audit evidence obtained was not relevant since it did not address any assertions of property, plant, and equipment. ISA 500: Audit Evidence requires that audit evidence must be sufficient, relevant, and reliable.

Required:
Explain THREE (3) assertions relevant to the audit of tangible non-current assets

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AA – Dec 2022 – L2 – Q5c – Audit and Assurance Evidence"

  • 4 Marks

FR – May 2018 – L2 – Q5c – Financial Reporting Standards and Their Applications

Identify two differences between the cost model and revaluation model for Property, Plant, and Equipment.

Once an entity has recognized an item of Property, Plant, and Equipment as an asset in its books, the entity can choose between two models (or methods) to account for the asset in subsequent measurement periods, that is, the period(s) after the asset has been acquired and before its disposition. The two models are the cost model and the revaluation model. The entity shall apply the same model to the entire class of property, plant, and equipment to which that asset is of similar nature and use in the entity’s operations.

Required:
Identify TWO differences between the cost and revaluation model for the measurement of Property, Plant, and Equipment. (4 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – May 2018 – L2 – Q5c – Financial Reporting Standards and Their Applications"

  • 5 Marks

CR – Mar 2023 – L3 – Q3a – Non-current assets: sundry standards (IAS 16, IAS 23, IAS 20 and IAS 40) ,IAS 36: Impairment of Assets,

Discuss the impairment of a printing machine owned by Dajanso Plc, including necessary computations.

Dajanso Plc owns a number of printing shops across the country. On 1 January 2021, the carrying amount of Dajanso’s largest printing machine was GH¢65 million. The machine had a remaining useful life of five years and a residual value of GH¢7 million using the cost model. Due to a fall in demand for printed books, management conducted an impairment review of the printing machine on 30 June 2021.

At this date, the estimated selling price was GH¢55 million, including GH¢4 million, which would be received after reconditioning the asset. Agent fees would be 5% of the appropriate fair price. If the machine is kept in use, it is estimated to generate real cash flows of GH¢20 million a year over its remaining life (now estimated to be three years), with a revised residual value of GH¢6 million. The following discount rates are applicable:

Rate Type Pre-tax Nominal Pre-tax Real Post-tax Nominal Post-tax Real
Discount Rate (p.a.) 11.9% 8.3% 10.5% 6.6%

Required:
In line with IAS 16 Property, Plant, and Equipment and IAS 36 Impairment of Assets, recommend how Dajanso would account for the plant in its financial statements for the year ended 31 December 2021. Show appropriate computations where necessary.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Mar 2023 – L3 – Q3a – Non-current assets: sundry standards (IAS 16, IAS 23, IAS 20 and IAS 40) ,IAS 36: Impairment of Assets,"

  • 5 Marks

CR – Dec 2022 – L3 – Q2c -IFRS 5: Non-current assets held for sale and discontinued operations

Provide accounting treatment for Ayew Plc's plant reclassification under IFRS 5.

Ayew Plc (Ayew) decided to dispose of one of its major production plants, which had become surplus to requirement. At 31 January 2021, all criteria were met for the plant to be classified as held for sale. On 31 July 2022, there was material evidence that the original sale plan would change and hence, it was considered not appropriate to retain the plant as held-for-sale. The plant is carried under the cost model.

Details of the plant are as follows:

GH¢’million
Cost (acquired on 1 August 2019) 20
Depreciation rate (straight line to nil residual value) 10%
At 31 January 2022:
Fair value 14
Costs to sell 0.4
At 31 July 2022:
Recoverable amount 15.2

Required:
In line with IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations, recommend how the above would be accounted for within the financial statements of Ayew for the year ended 31 July 2022.
(Total: 5 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CR – Dec 2022 – L3 – Q2c -IFRS 5: Non-current assets held for sale and discontinued operations"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan