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Required: A manufacturing company holds large amounts of factory machinery on its balance sheet. The machinery is custom built using specifications that make it unsuitable

Required: A manufacturing company holds large amounts of factory machinery on its balance sheet. The machinery is custom built using specifications that make it unsuitable for use in any other location. For this reason it is unlikely that there could exist a resale market for this machinery. Discuss:

  1. two advantages of using historical cost to measure this machinery. (2.5 marks)
  2. two advantages of using the revaluation model to measure this machinery. (2.5 marks)

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