Accounting for PPE, Financial Accounting

Assignment Help:
Acquisition of Assets:
The cost method of accounting is used for the initial recording of all acquisitions of assets controlled by the authority. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition, including architects’ fees and engineering design fees and all other costs incurred in getting the assets ready for use.

Property, plant and equipment:
All items of property, plant and equipment with a cost, or other value, in excess of $3,000 are recognised in the year of acquisition. All other such items with a cost, or other value, less than $3,000 are charged as an expense.

Items or components which form an integral part of an asset are recognised as a single asset (functional asset). The recognition threshold is applied to the aggregate cost of each functional asset.

The cost of replacing the ‘B55’ fire appliance photographed on the front cover of the latest annual report with a unit of the same or similar capability is estimated to be $260,000, including fitting costs to convert the standard vehicle to a fire fighting unit of $70,000.

A spare set of tyres for the ‘B55’ appliance is obtainable at a current cost to the CFRA of approximately $5,000. Fitting costs are typically included in the overall cost of a new set of tyres. Tyres are typically replaced on these units every twelve (12) months.


---the question:


1. Assuming the CFRA acquired a replacement fire appliance for the ‘B55’ during the last financial year, state the cost of acquisition on the basis of the information supplied.
(This has to be relate to AASB 116)

Related Discussions:- Accounting for PPE

Generally accepted accounting principles (gaap), Generally Accepted Account...

Generally Accepted Accounting Principles (GAAP) are guidelines for companies to follow as they prepare and issue financial statemnents. Let's start by getting an understanding of w

Discuss the theoretical determinants , i.   Explain carefully what is meant...

i.   Explain carefully what is meant by a price earnings ratio. ii   Utilising a valuation model identify and briefly discuss the theoretical determinants of the ratio. iii

Financial ratio assignment, Critical Thinking Exercise Instructions: select...

Critical Thinking Exercise Instructions: select a company , Wendy''s or McDonald''s . Perform a Google search, key in McDonalds or Wendys Key financial ratios. I suggest you use f

NON PROFIT ORGANISATIONS, USING PROPER ILLUSTRARTION,ELLOBORATE ON THE REGU...

USING PROPER ILLUSTRARTION,ELLOBORATE ON THE REGULATORY FRAMEWORK THAT SUPPORTS FINANCIAL REPORTING IN NON PROFIT ORGANISATIONS.

Illustration: holding company with direct share holding, Illustration: Hold...

Illustration: Holding company with direct share holding Rain Ltd., Storm Ltd. and Thunder Ltd. are in the business of manufacturing tents. Their balance sheets as at 30 September

Calculate the return on investments based on cash flow, This project allows...

This project allows you to think critically and apply decision-making management techniques. In this project,  you need to solve a bond portfolio problem, a diversified portfolio p

Prepare all journal entries for 2013, A summary of Jarvis Company's Decembe...

A summary of Jarvis Company's December 31, 2013, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: Age Gro

Unrealized profit on property, Unrealized profit on Property, Plant and Equ...

Unrealized profit on Property, Plant and Equipment Where one company sells an item of PPE  to the other company in the group then, this will lead to two main problems. a) The se

Assumption of the eoq model, The basic EOQ model is depends on the subseque...

The basic EOQ model is depends on the subsequent assumption: 1) The forecast usage or demand for a specified period, usually one year, is identified 2) The usage/demand is ev

Economic order quantity formula, For getting the EOQ formula we shall use t...

For getting the EOQ formula we shall use the subsequent symbols: U = annual usage/demand Q = quantity ordered F = cost per order C = per cent carrying cost P  = pric

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd