Week_2_Chapter_6__Accounting_for_Property_Plant_and_Equipment__1_

What is AASB 116?

Accounting standard that outlines requirements for revaluations, depreciation, and determining acquisition cost of property, plant, and equipment.

Define Fair Value.

The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Explain Revaluation Increment.

An increase in the carrying amount of a non-current asset due to revaluation to fair value.

What does Revaluation Decrement mean?

A decrease in the carrying amount of a non-current asset due to revaluation.

What is an Impairment Loss?

A write-down of an asset's carrying amount when it exceeds its recoverable amount.

Define Derecognition.

The point when an asset is removed from the statement of financial position, typically when sold or when no future economic benefits are expected.

What is Recoverable Amount?

The higher of an asset’s fair value less costs to sell and its value in use.

Describe Accumulated Depreciation.

The total depreciation expense allocated to an asset over its useful life.

What is a Revaluation Surplus?

An increase in equity from the revaluation of assets, shown as part of shareholders’ funds.

Explain Cash-Generating Unit.

The smallest identifiable group of assets that generates cash inflows independent of other assets.