Question
Helena Ltd uses the revaluation model for its property, plant and equipment and complies with AASB 116 Property, Plant and Equipment and AASB 136 Impairment
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Helena Ltd uses the revaluation model for its property, plant and equipment and complies with AASB 116 Property, Plant and Equipment and AASB 136 Impairment of Assets. Included as part of this class of asset is a piece of non-depreciable property that the company purchased on 1 July 2020 for $4,071,000. The following information relates to this asset:
Estimates:
30 June 2021
30 June 2022
Fair value
$4,071,000
$3,776,000
Costs to Sell
$271,400
$256,500
Value in Use
$4,064,600
$4,455,680
There are indicators of impairment and/or reversal of impairment at 30 June 2021 and 30 June 2022.
Required:
What is the MOST correct statement in relation to the year ended 30 June 2021?
A. Helena Ltd would recognise a revaluation decrement of $6,400.
B. Helena Ltd would recognise an impairment loss equal to $6,400.
C. Helena Ltd would recognise no impairment loss.
D. Helena Ltd would recognise an impairment loss equal to $271,400.
Helena Ltd uses the revaluation model for its property, plant and equipment and complies with AASB 116 Property, Plant and Equipment and AASB 136 Impairment of Assets. Included as part of this class of asset is a piece of non-depreciable property that the company purchased on 1 July 2020 for $4,071,000. The following information relates to this asset:
| Estimates: | 30 June 2021 | 30 June 2022 |
| Fair value | $4,071,000 | $3,776,000 |
| Costs to Sell | $271,400 | $256,500 |
| Value in Use | $4,064,600 | $4,455,680 |
There are indicators of impairment and/or reversal of impairment at 30 June 2021 and 30 June 2022.
Required:
What is the MOST correct statement in relation to the year ended 30 June 2021?
| A. | Helena Ltd would recognise a revaluation decrement of $6,400. | |
| B. | Helena Ltd would recognise an impairment loss equal to $6,400.
| |
| C. | Helena Ltd would recognise no impairment loss. | |
| D. | Helena Ltd would recognise an impairment loss equal to $271,400. |
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Financial Accounting
Authors: LibbyShort
7th Edition
78111021, 978-0078111020
