Question 3 14 Marks (a) AASB 116 Property, Plant and Equipment prescribes an entity to switch from fair value basis of valuation to cost basis, or cost basis to the fair value basis. Required: Explain this requirement in your own words, and when do you think an entity can switch from fair value basis of valuation to cost basis, or cost basis to the fair value basis? 4 Marks (b) An entity has two plants, Plant X and Plant Y. On 30 June 2019, the cost of Plant X was $150,000 and accumulated depreciation was $60,000. The cost of plant Y was $100,000 and the accumulated depreciation was $15,000. The entity uses cost model and depreciates both plants using straight line basis over 10 years. On 30 June 2020, the entity changes the measurement basis from the cost model to the revaluation model. The entity revalued Plant X to $90,000 and estimated the useful life of 8 years, and revalued Plant Y to $70,000 and estimated the useful life of 4 years. Required: Prepare journal entries to record depreciation for Plant X and Plant Y for the year ended 30 June 2020, assuming there was no revaluation. Provide the appropriate journal entries to record the revaluations on 30 June 2020 for Plant X and Plant Y.