The present value of the future cash flows expected from continuing to use and then disposing of an asset

The current market price of an asset

The depreciated replacement cost of an asset

The amount a buyer would pay for the asset in the open market

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Free ACCA Financial Reporting Practice Questions & Answers

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Question 211

For a lessor in a finance lease, the initial recognition is:

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Question 212

Gross investment in a finance lease is:

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Question 213

How should the lessor account for initial direct costs in an operating lease?

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Question 214

A property is held partly as investment property (60%) and partly for own use (40%). How should it be classified?

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Question 215

An entity measures investment property at fair value. During the year, fair value falls from 800,000 to 720,000. No depreciation is charged. What is the income statement impact?

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Question 216

A lessee records a right-of-use asset of 200,000 at the start of a 5-year lease. The lease term equals the asset's useful life and ownership transfers at the end. Depreciation method:

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Question 217

An operating lease from the lessor's perspective: initial direct costs are:

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Question 218

Which of the following correctly describes the lessor accounting for an operating lease?

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Question 219

A dealer-lessor sells machinery with a cost of 80,000, fair value (and sales price) of 100,000. The lessee will return the asset at lease end and the unguaranteed residual value is 10,000. Lease payments total 95,000. What is the manufacturer profit recognised at inception?

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Question 220

An entity transfers a property from investment property (fair value model) to owner-occupied use. At the date of transfer, the property's fair value is 900,000 and its previous carrying amount (also fair value) was 750,000. How is the property recorded on transfer?

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Question 221

A lessee enters a 4-year lease with annual payments of 20,000 at year end. The implicit rate is 6%. The PV annuity factor (6%, 4 years) is 3.465. What is the initial lease liability?

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Question 222

A lessee has a 3-year lease with annual payments of 30,000 payable at the start of each year (annuity in advance). The discount rate is 5%. PV annuity factor for 3 years at 5% is 2.723 (in arrears). What is the lease liability at commencement?

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Question 223

A finance lease from the lessor's perspective — the net investment is 500,000 and implicit rate is 7%. Annual payment received is 120,000. What is finance income recognised in year 1?

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Question 224

A lessee has a lease liability of 150,000. Year 2 payment is 40,000 paid at year end. Effective rate is 8%. What is the interest expense and closing liability for year 2?

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Question 225

Which of the following is NOT included in the initial cost of property, plant and equipment?

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Question 226

Under the straight-line depreciation method, the annual depreciation charge is:

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Question 227

Subsequent expenditure on an existing asset is capitalised (added to its cost) when:

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Question 228

What is the residual value of an asset?

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Question 229

Under the revaluation model for PPE, how frequently must valuations be updated?

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Question 230

When an asset is disposed of, the gain or loss on disposal is calculated as:

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Question 231

An impairment loss arises when:

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Question 232

What is the recoverable amount of an asset?

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Question 233

Value in use is:

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Question 234

Which of the following is an external indicator of impairment?

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Question 235

When an asset is acquired mid-year, how is depreciation typically calculated for the first year?

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Question 236

What does the reducing balance depreciation method produce?

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Question 237

What type of property qualifies as investment property?

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Question 238

Which of the following is NOT capitalised as part of the cost of a self-constructed asset?

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Question 239

Which of the following is capitalised under IAS 23 Borrowing Costs?

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Question 240

What happens to depreciation when an asset is fully depreciated but still in use?

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Free ACCA Financial Reporting Practice Questions & Answers

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