Notesale: Turn your study into money

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Assets
Definition: resources CONTROLLED by the entity as a result of PAST EVENTS and from
which FUTURE ECONOMIC BENEFITS (FEB) expected to flow to the entity
...
Probable
 FEB associated with the asset flow to or from entity
...
Measure reliably
 Non-current asset at depreciated historical cost (Definition: price of an asset
on balance sheet is based in its ORIGINAL COST acquired by company) or
fair value (Definition: amount of organisation would RECEIVE IT
DISPOSED OF AN ASSET on balance sheet)
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[NZ IAS 2]
 Marketable securities at market value
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Considered the goods of immaterial nature
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Most important sources of the organisation that grant competitive advantages to other
companies
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Intangible Asset
-

An asset that has PHYSICAL in nature
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Include both FIXED ASSETS such as machinery, buildings and land and CURRENT
ASSETS such as inventory
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Depreciation Method
1
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 Produces a CONSTANT depreciation expense
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Double declining balance
 DOUBLES the straight-line depreciation amount and SAME
PERCENTAGE applied to un-depreciated amount in subsequent years
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Diminishing balance
 Depreciate at FIXED PERCENTAGE
1



Formula: 1 −

𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 (𝑅𝑉)
√
𝑐𝑜𝑠𝑡 (𝐶)
𝑛

= 1−

𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 (𝑅𝑉) 𝑛
𝑐𝑜𝑠𝑡 (𝐶)

4
...

 Produces VARIABLE depreciation expense
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Revaluation Model
Definition: made with sufficient regularity so CARRYING AMOUNT (CA) of asset in class
does NOT DIFFER materially from its FAIR VALUE (FV) [NZ IAS 16]
Revaluation Increments
Journal Entry
DR Asset (name of the asset for example building)
CR Revaluation Surplus
(Recognise an increment of on asset)
*when the asset does NOT HAVE DEPRECIATION VALUE
DR Accumulated Depreciation
CR Asset
(Recognise accumulated depreciation of an asset)
DR Asset
CR Accumulated Depreciation
CR Revaluation Reserve
(Recognise an increment of an asset)
*when the asset HAVE DEPRECIATION VALUE
Revaluation Decrements
Journal Entry
DR Loss on Revaluation
CR Asset
(Recognise a decrement of an asset)
*when the asset does NOT HAVE DEPRECIATION VALUE

DR Accumulated Depreciation
CR Asset
(Recognise accumulated depreciation of an asset)
DR Asset
DR Loss on Revaluation
CR Accumulated Depreciation
(Recognise a decrement of an asset)
*when the asset HAVE DEPRECIATION VALUE
Revaluation Decrements to Increment
Journal Entry
DR Loss on Revaluation
CR Asset
(Recognise a decrement of an asset)
DR Revaluation Reserve
DR Loss on Revaluation
CR Asset
(Recognise increment of an asset)
Revaluation Increment to Decrement
Journal Entry
DR Asset
CR Revaluation Surplus
(Recognise an increment of an asset)
DR Asset
CR Gain on Revaluation
CR Revaluation Surplus
(Recognise increment of an asset)

Heritage Asset
Definition: held for duration of their physical lives because of their UNIQUE heritage or
CULTURAL ATTRIBUTES
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2
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4
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6
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8
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Value in cultural, environmental, educational and historical terms
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Value may increase over time
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Cannot be replaced
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Retained heritage asset
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Sometime sell portion to cover operating costs or purchase another asset
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[NZ IAS 41]
Agricultural activity
Definition: management by an entity of biological transformation of biological asset for sale,
into agricultural produce or additional biological assets
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Harvest
Definition: detachment of produce from a biological asset
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2
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4
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Discount rates
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Impact of unplanned or unexpected events such as natural disaster
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Bearer: livestock
from grape vines
and fruit trees
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2
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4
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Specialised in nature and not usually have alternative uses
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Constraints on disposal
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2
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4
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Held over long period of time
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New technology and materials
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(benefits is greater than human cohort)
Does not generate profit

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