Under the Cost Model, After Initial Recognition an Item of Property

question 20

Multiple Choice

Under the cost model, after initial recognition an item of property, plant and equipment must be carried at its:

• A) estimated liquidation value.
• B) cost less accumulated depreciation and less accumulated impairment losses.
• C) initial cost.
• D) current replacement cost.

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Definitions:

Equitable Assignment

Equitable assignment refers to a transfer of rights or benefits from one party to another that is recognized by courts of equity despite lacking the formal legal structure of a statutory assignment.

Fraudulent Misrepresentation

A false statement made knowingly, without belief in its truth, or recklessly, with intent to deceive and induce another to enter into a contract.

Innocent Misrepresentation

A false statement made by someone who believed it to be true, leading another party to enter into a contract.

Misrepresentation

Misrepresentation is the providing of false or misleading information that induces another party to enter into a contract, potentially leading to legal consequences.