Under AASB 116 Property, Plant and Equipment, an asset is defined as 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.

1. An item of machinery currently held for sale in the near future: This would not be considered an asset under AASB 116. This is because it is not expected to be used during more than one period, which is a key characteristic of property, plant, and equipment.

2. An oil painting on the wall of a building that is used by the company to perform its main business activity of selling motor vehicles to customers: This would not be considered an asset under AASB 116. While it may contribute to the overall atmosphere of the business, it does not directly generate future economic benefits.

3. Apple trees on a farm: These would be considered an asset under AASB 116. They are tangible items that are expected to be used during more than one period and are expected to generate future economic benefits by producing apples that can be sold.

4. Lithium mineral rights: These would not be considered an asset under AASB 116. While they do have the potential to generate future economic benefits, they are considered intangible assets rather than property, plant, and equipment.

So, the correct answer is "Apple trees on a farm".

Question

Under AASB 116 Property, Plant and Equipment, an asset is defined as 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.

1. An item of machinery currently held for sale in the near future: This would not be considered an asset under AASB 116. This is because it is not expected to be used during more than one period, which is a key characteristic of property, plant, and equipment.

2. An oil painting on the wall of a building that is used by the company to perform its main business activity of selling motor vehicles to customers: This would not be considered an asset under AASB 116. While it may contribute to the overall atmosphere of the business, it does not directly generate future economic benefits.

3. Apple trees on a farm: These would be considered an asset under AASB 116. They are tangible items that are expected to be used during more than one period and are expected to generate future economic benefits by producing apples that can be sold.

4. Lithium mineral rights: These would not be considered an asset under AASB 116. While they do have the potential to generate future economic benefits, they are considered intangible assets rather than property, plant, and equipment.

So, the correct answer is "Apple trees on a farm".

Knowee AI · Accepted Answer

Under AASB 116 Property, Plant and Equipment, an asset is defined as 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.

1. An item of machinery currently held for sale in the near future: This would not be considered an asset under AASB 116. This is because it is not expected to be used during more than one period, which is a key characteristic of property, plant, and equipment.

2. An oil painting on the wall of a building that is used by the company to perform its main business activity of selling motor vehicles to customers: This would not be considered an asset under AASB 116. While it may contribute to the overall atmosphere of the business, it does not directly generate future economic benefits.

3. Apple trees on a farm: These would be considered an asset under AASB 116. They are tangible items that are expected to be used during more than one period and are expected to generate future economic benefits by producing apples that can be sold.

4. Lithium mineral rights: These would not be considered an asset under AASB 116. While they do have the potential to generate future economic benefits, they are considered intangible assets rather than property, plant, and equipment.

So, the correct answer is "Apple trees on a farm".

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