In Applying AASB 101, the Term 'Class of Non-Current Asset

question 8

Multiple Choice

In applying AASB 101, the term 'class of non-current asset' means:

• A)the line items specified by AASB 101.68
• B)is not defined
• C)is the same as that in the old AASB 1041
• D)the classification adopted by IOSCO, the international association of securities regulators

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Definitions:

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Working Capital Investment

The funds invested in the short-term assets of a company, such as inventory and receivables, to support its daily operations.

Salvage Value

The estimated residual value of an asset at the end of its useful life, important for calculating depreciation.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.