1. Many organisations elect not to measure their property, plant and equipment at fair value, but rather, prefer to use the 'cost model'. This will provide lower total assets and lower measures, such as net asset backing per share. You are required to answer the following questions:

a) What might motivate directors not to revalue the property, plant and equipment?

b) What are some of the effects the decision not to revalue might have on the firm's financial statements?

2. 'Asset revaluation is the same as impairment losses'. What is wrong with this statement? Provide the correct explanation of these two terms, in their correct context.

3. TAKULAH Traders Ltd purchased a machine for $650 000 and there was an accumulated depreciation balance of $110 000 at 30 June 2022. Its fair value is assessed at this time, with its first revaluation as $450 000. The machine's useful life is expected to be 5 more years and the residual value to be $50 000. On 1 July 2023 the asset's fair value is $460 000 and the residual value and useful life are expected to be unchanged (that is, there is 4 years of remaining life). Required: Provide the journal entries necessary to account for all the above transactions and events up to 1 July 2023, in accordance with AASB 116 if the revaluation is undertaken.