Costs Incurred to Increase the Operating Efficiency or Useful Life

question 93

Multiple Choice

Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as

• A) capital expenditures.
• B) expense expenditures.
• C) ordinary repairs.
• D) revenue expenditures.

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Definitions:

Cash-generating Units

The smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets or groups of assets.

AASB 6/IFRS 6

Standards guiding the exploration for and evaluation of mineral resources, providing criteria on the recognition and measurement of exploration and evaluation expenditures.

Non-regenerative Resources

Resources that cannot be replenished or renewed after their consumption, such as fossil fuels and minerals.