12 Questions
What is a practical approach to identifying components of a network asset?
Consider the entity's mid-/long-term capital budget
Why should an entity involve its engineering staff in the identification of network asset components?
To assist in repairs and maintenance schedules
What accounting treatment do some network companies apply for expenditure related to their networks under national GAAP?
Fully expensed without depreciation
What is specific to determining the breakdown of significant parts of a network asset?
The entity's circumstances
Why is the renewals accounting method unacceptable under IFRS for network companies?
It deviates from normal fixed asset accounting and depreciation requirements
Which factor should be considered in analyzing network assets according to the text?
Physical location of the asset
Which IFRS standard provides an exemption for first-time adopters regarding the depreciation cost of assets?
IFRS 1
What is a useful guide when determining if replacement costs should be capitalized?
Materiality
What must be determined for all significant components of an asset?
Residual value
How should separate parts with the same useful life and depreciation method be treated for depreciation purposes?
Grouped together
What assumption might network companies traditionally hold regarding the useful life of their assets?
Indefinite useful life
When can first-time IFRS adopters use a value that is not depreciated cost as deemed cost on transitioning to IFRS?
According to IFRS 1
Learn about a practical approach to identifying significant components in network assets, using capital budget and engineering staff involvement. Understand how to pinpoint major components of a network that will need replacement over the next few years.
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