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Week 9: Non- current assets (Disposal of PPE (Dr Cash, if profit => Cr…
Week 9: Non- current assets
Tangible Non- current assets
initially measured at cost
fair value: normal selling price (AASB 13)
subsequent measurement
Cost model (impairment model) - 3 steps
Impair if carrying amount > recoverable amount
Dr Impairment Expense
Cr Accumulated Impairment
Carrying amount = Cost - Accumulated Depreciation - Accumulated Impairment
Recoverable amount = higher of (fair value - cost to sell) and present value
Revaluation model (fair value model) - 4 steps -
remember to always get rid of accumulated depreciation
to test if the carrying amount is material different from the fair value
CA < FV => Dr Asset and Cr Revaluation Surplus
CA > FV => Dr Revaluation Expense and Cr Asset (if material, influence economic decision)
If 1st revaluation decreases and 2nd revaluation increases => Dr Asset and Cr Revaluation Income + Cr Revaluation Surplus
If 1st revaluation increases and 2nd revaluation decrease => Cr Asset and Dr Revaluation Surplus + Dr Revaluation Expense
Disposal of PPE
Dr Cash
if profit => Cr Gain on Sale. if loss => Dr Loss on Sale
Dr Accumulated Impairment
Cr Asset (PPE)
Dr Accumulated Depreciation
Intangible Asset (no physical substance) -
MUST SEE THE PPT FOR MORE DETAILS - TOO MANY THEORY
i.e: patents, franchise, trademarks
Identifiable
: i.e: franchise, trademark, ...
Unidentifiable
: i.e: reputation (cannot separate from entity itself)
Initial measurement at cost (buy separately)
Part of business acquisition - fair value (buy together)