Under the cost model for property, plant and equipment, how is an asset normally measured after initial recognition?
Correct answer: B. At cost less accumulated depreciation and impairment losses
- A. At fair value less future tax charges
- B. At cost less accumulated depreciation and impairment losses
- C. At residual value plus accumulated depreciation
- D. At replacement cost less disposal expenses
Explanation
The cost model carries property, plant and equipment at its cost less accumulated depreciation and accumulated impairment losses. Fair value measurement is associated with the revaluation model, not the cost model.
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About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
Practise Depreciation and Non-Current Assets
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