No less than 4 sentences to each bullet.
“Self Constructed Assets and Nonreciprocal Transfers” Please respond to the following:
- Imagine you are the senior accountant in the Fixed Assets department at your organization, and management is undecided as to whether it should construct its fixed assets or purchase such assets from an outside source. You are responsible for preparing a report to management, highlighting the advantages and disadvantages of self-constructed assets. Suggest to management two (2) advantages of purchasing the assets from an outside organization, as opposed to constructing the assets internally. Justify your response.
- Imagine that management is considering a nonreciprocal transfer of an old asset. Determine the key arguments for and against the accounting treatment of a nonreciprocal transfer. Select a position for or against the accounting treatment, and explain the method that reflects the best accounting practice.
“Impaired Assets and Depreciation Methods” Please respond to the following:
- Summarize the authoritative guidance for asset impairments under IFRS. Give at least two (2) examples of events that could cause an asset to be tested for impairment, and recommend the best method to determine the fair value of an impaired asset. Explain the rationale for your recommendation.
- Differentiate between the decreasing-charge depreciation methods and the special depreciation methods, and suggest the method that would result in the highest depreciation during the first year of operations. Imagine you are a manager at Delta Airlines and are giving a presentation to the Board of Directors concerning the best depreciation method to use for the purchase of twenty-five (25) new aircrafts. Explain to the Board the method that would result in the highest depreciation charge for the next five (5) years.