Question
ABC Ltd purchases an equipment for $1,000,000 on January 1, 2020. The equipment has a useful life of five years, is depreciated using the straightline
ABC Ltd purchases an equipment for $1,000,000 on January 1, 2020. The equipment has a useful life of five years, is depreciated using the straightline method of depreciation, and its residual value is zero. ABC chooses the revaluation model for its equipment over the life of equipment. The fair value of equipment at 31 December 2020 (the end of reporting period of ABC Ltd) is $850,000.
On 31 December 2020, the company should record in the accounting book:
| A. | Revaluation surplus $50,000 | |
| B. | Revaluation expense $150,000 | |
| C. | Revaluation expense $50,000 | |
| D. | Revaluation income $50,000 |
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