The Fair Value Model of Accounting for PP&E Assets

question 28

Multiple Choice

The fair value model of accounting for PP&E assets

• A) recognizes changes in the asset's fair value in other comprehensive income.
• B) should be applied to investment property only.
• C) once chosen for one investment property does not have to be applied to all investment property.
• D) is acceptable under both IFRS and ASPE.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, divided by sales revenue, expressed as a percentage. It represents the proportion of sales revenue that exceeds direct costs.

Gross Profit

The financial metric determining the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Retailer

An entity that sells goods or commodities directly to consumers.

Wholesalers

Businesses that buy goods in large quantities from producers to sell them in smaller quantities to retailers or other businesses.