Reference no: EM132765964

Problem 1: Which of the following may qualify as a qualifying asset?

a) 100-storey building purchased from a contractor

b) Titanic ship that took 100 years to construct, purchased from a retail store

c) Movie that takes 10 years to shoot

d) Building that takes 3 years to construct, to be classified as investment property under fair value model

Problem 2: What is the general principle of capitalizing costs to property, plant and equipment?

a) All costs which will provide a benefit beyond one year are capitalized.

b) Only depreciable costs are capitalized.

c) All cost associated with the acquisition or construction of a plant asset are capitalized.

d) All cost incurred to bring the asset to its intended condition and location are capitalized.

e) All costs relevant to the acquisition and long-term maintenance of a plant asset are capitalized.