Indicate  whether the following statement is true or false.

IAS 16 allows entities to choose between the cost model and the fair value model in the subsequent measurement of its items of property plant and equipment.

Indicate whether the following statement is true or false.

Items of property plant and equipment that are measured under the revaluation model, must be revalued to fair value on an annual basis.

Identify whether the following statement is true or false:

 Deferred

tax liabilities arise from taxable temporary differences whereas deferred tax

assets arise from deductible temporary differences.

Select one:

Select if the statement below is true or false.

Land has a cost of C500 000, and has never been revalued. At year end, an independent valuer determines that the fair value of the land is C850 000. When the entity revalues the land to its fair value, the amount recognised in profit or loss as revaluation income will be C350 000.

Indicate whether the following statement is true or false: 

The tax expense as presented on the face of the statement of comprehensive income reflects the tax incurred on taxable profits.

Indicate whether the following statement is true or false:

forward.

Indicate whether the following statement is true or false:

Costs involved in the development phase that fail to meet the criteria necessary for capitalisation would be expensed but may be capitalised in a subsequent period if the criteria for capitalisation are subsequently met.

Indicate  whether the following statement is true or false.

Entities have a free choice as to whether to use the cost model or the revaluation model, and may even choose to measure one class of property plant and equipment using the cost model and another class of property plant and equipment using the revaluation model, but must always use the same measurement model to measure all assets within a class.

The following information relates to question 11.

A plant costs C100 000.  This plant includes 3 separate parts:

·         part A with a cost of C48 000,

·         part B with a cost of C2 000, and

·         part C with a cost of C50 000. 

The cost of part A and part C are each considered to be significant relative to its total cost of C100 000 whereas the cost of part B is considered to be insignificant. 

Although the cost of part B is considered to be insignificant, this part is critical (i.e. very significant from a practical perspective) to the effective running of the plant. 

The useful life and method of depreciation of part B is similar to the useful life and method of depreciation of Part C.

The method of depreciation appropriate for part A is different to the method of depreciation appropriate for parts B and C.

Indicate whether the following is true or false:

The cost of Part A and Part C must each be depreciated separately since each of these parts has a cost that is significant relative to the total cost of the plant. The cost of Part B must be expensed. 

A deferred tax

asset balance reflects the income tax 

Select one: