Under AASB 101 the Classification of Assets into Current and Non-Current

question 55

Multiple Choice

Under AASB 101 the classification of assets into current and non-current will depend on the entity's:

• A) average operating cycle.
• B) current accounting period.
• C) ordinary course of business
• D) normal operating cycle.
• E) 12 month cycle.

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Definitions:

Salvage Value

The estimated resale value of an asset at the end of its useful life, taken into consideration for depreciation calculations.

Net Present Value

A financial metric that calculates the value of a projected income stream in today's dollars, net of the initial investment.

Discount Factor(s)

A multiplier used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the time value of money.

Discount Rate

Discount rate is the interest rate used to determine the present value of future cash flows, essential in evaluating investment opportunities and financial decisions.