Assets

Question 1

What is an Asset?

Answer 1

a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

Question 2

Characteristics for an asset

Answer 2

1. The resource must be controlled by the entity
   ○ The capacity of the entity to benefit from the asset in the pursuit of its objectives, and to deny or regulate the access of others to the benefit
2. The resource must be as a result of a past event
3. Future economic benefits are expected to flow to the entity from the resource

Question 3

Recognition of an Asset

Answer 3

○ Probable
- It is more likely that future economic benefits will flow from the asset to the business controlling it

○ Reliably Measured
-The value of the asset can be measured reliably

• Involves the use of estimates

Question 4

How are assets classified?

Answer 4

according to their nature or function

Question 5

Classifications of assets can reflect (5)

Answer 5

○ Liquidity 
○ Marketability
○ Physical characteristics
○ Expected timing of future economic benefits
○ Purpose