Analysis of Long-Term Assets

When a company chooses to capitalize an expenditure rather than expense it immediately, what is the immediate impact on the Cash Flow from Operations (CFO)?

Under US GAAP, how are research and development (R&D) costs generally treated?

Which of the following best describes the 'Value in Use' used in IFRS impairment testing?

A company constructs a new machine for its own use. How should the interest costs incurred during the construction period be treated?

Under IFRS, if an asset is revalued upward for the first time, where is the gain recognized?

Which depreciation method results in the highest depreciation expense in the first year of an asset's life?

An asset has a cost of 10,000, a residual value of 1,000, and a useful life of 5 years. What is the depreciation expense in Year 1 using the Double Declining Balance method?

Under US GAAP, which of the following statements about the reversal of impairment losses on assets held for use is correct?

Which of the following intangible assets is NOT amortized?

How is the 'Average Age' of a firm's fixed assets estimated?

Under IFRS, if an asset is classified as Investment Property and the Fair Value Model is used, where are changes in fair value reported?

Which of the following expenditures is most likely to be expensed immediately?

Company A acquires Company B. Company A pays 1,000. The fair value of Company B's identifiable assets is 800 and liabilities is 100. What amount of Goodwill does Company A record?

When an asset is exchanged for another asset, how is the gain or loss computed?

Under US GAAP, which step is performed first in the impairment testing of a long-lived asset held for use?

What is the impact of an impairment loss on the Asset Turnover ratio in the year of impairment?

Which of the following requires Component Depreciation?

Compared to the Straight-Line Method, what is the effect of using the Double Declining Balance method on ROE in the early years of an asset's life?

A company has an asset with a Carrying Value of 50. Under IFRS, the Fair Value less selling costs is 40, and the Value in Use is 45. What is the impairment loss?

Under the IFRS Revaluation Model, if an asset revaluation results in a loss that reverses a previous revaluation surplus, how is the loss treated?

Which of the following is considered an 'Identifiable' intangible asset?

In the context of US GAAP software development costs, when does capitalization begin?

How does the estimated useful life assumption affect the net income in the later years of an asset's life if the straight-line method is used?

If a company permanently abandons a piece of machinery, what loss is reported in the income statement?

Which ratio is estimated by dividing Net Block by Annual Depreciation Expense?

For a long-lived asset classified as 'Held for Sale', which of the following statements is true?

Company X has Gross Block = 200, Accumulated Depreciation = 50, and Annual Depreciation Expense = 10. What is the estimated Total Useful Life of the assets?

Under US GAAP, a long-lived asset is considered impaired if:

Which cash flow activity reflects the expenditures for capitalizing long-term assets?

An analyst observes that a company using the Straight-Line method has a lower Asset Turnover ratio than a peer using the Double Declining Balance method. Assuming identical assets and operations, what explains this?

Under IFRS, how often must intangible assets with indefinite lives be tested for impairment?

A company sells a machine for 50. The machine originally cost 100 and had accumulated depreciation of 60. What is the gain or loss reported?

What is 'Economic Goodwill'?

If a company uses the Units of Production method, depreciation expense is based on:

Which of the following is an effect of capitalizing interest costs?

Under IFRS, what is the maximum amount an impairment loss can be reversed?

When forecasting future depreciation, why might an analyst focus on 'Gross Block' rather than 'Net Block'?

In a period of rising prices, which depreciation method results in a Net Income that is closest to current replacement cost economics?

Which of the following is a required disclosure for PPE?

Company Z uses the Revaluation Model (IFRS). An asset cost 100. At Year 1, FV is 120. At Year 2, FV drops to 90. What is the P&L impact in Year 2?

How does an impairment loss affect the Debt-to-Equity ratio?

A company capitalizes a $50,000 cost that should have been expensed. The asset has a 5-year life (SLM). What is the effect on Year 1 Net Income (ignore taxes)?

Which inventory-like characteristic does 'Investment Property' under IFRS possess when using the Fair Value Model?

Under US GAAP, which of the following is true regarding component depreciation?

What is the 'Recoverable Amount' of an asset under IFRS?

If a firm uses the Cost Model for Investment Property under IFRS, how is it treated?

What happens to the Fixed Asset Turnover ratio if a company switches from expensing to capitalizing maintenance costs (assuming these costs improve asset life)?

Which of the following costs incurred for an internally generated intangible asset is capitalized under IFRS?

When comparing two firms, one using Straight-Line and one using DDB depreciation, an analyst must adjust for:

Which statement best describes the treatment of 'Start-up costs'?