Question
Tiara Ltd has the following assets in its statement of financial position as at 30 June 2022. $ Plant and equipment, at independent valuation 2
Tiara Ltd has the following assets in its statement of financial position as at 30 June 2022.
$ | |
---|---|
Plant and equipment, at independent valuation | 2 000 000 |
Less: Accumulated depreciation | 400 000 |
Carrying amount | 1 600 000 |
The plant and equipment originally cost Tiara$600 000in 2020, but due to market conditions the fair value of the plant and equipment has increased. The directors of Tiara Ltd are concerned about the effects of the higher carrying value on profitsowing to the higher depreciation it is reducing profits. They ask you, the accountant, to reverse the previous revaluation. Being ethical in nature, what would you do?
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