Question
Question 3 (10 marks) Part A (7 marks) On 30 June 2018, the statement of financial position of Koala Ltd showed the following noncurrent asset
Question 3 (10 marks)
Part A (7 marks)
On 30 June 2018, the statement of financial position of Koala Ltd showed the following noncurrent asset after charging depreciation:
Buildings 300,000
Accumulated Depreciation 100,000
Carrying Amount 200,000
The company adopted fair value for the valuation of its non-current assets. This has resulted in the recognition in previous periods of an asset revaluation surplus for the building of $14,000. On 30 June 2019, an independent valuer assessed the fair value of the building to be $160,000.
Required Prepare the journal entries to revalue the buildings as at 30 June 2019. Note: Ignore tax effect for this question.
Part B (3 marks)
In accordance with AASB 116 Property Plant and Equipment (PPE) and entity has an option to elect the cost model or fair value (revaluation model) for subsequent measurement of PPE. Where an entity elects to use either cost or fair value as the basis for measuring property, plant and equipment, can it elect to switch to the other method at a later stage.
Discuss.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started