ACCT2110 REVALUATION & IMPAIRMENT OF PPE
REVALUATION & IMPAIRMENT OF PPE
Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: THEend8_
ACCT2110 - Tutorial 1 Tutorial Questions & Problems
TOPIC 1: REVALUATION & IMPAIRMENT OF PPE
TUTORIAL QUESTIONS
Question 12:
Why should valuation increments be credited to a revaluation surplus (a component of
equity) while revaluation decrements are recognised as expenses?
Question 14:
a) What is ‘recoverable amount’?
b) In measuring recoverable amount, is it always necessary to determine both an
asset’s fair value less costs of disposal and its value-in-use?
c) Para 21 of AASB 136 states that ‘if there is no reason to believe that an asset’s
value in use materially exceeds its fair value less costs of disposal, the asset’s fair value
less costs of disposal may be used as its recoverable amount’. To what type of asset might
this statement be applicable?
Question 15:
(a) Distinguish between a revaluation decrement and an impairment loss.
(b) If a revalued asset’s fair value is determined by its market value, is the asset likely
to be impaired if costs of disposal of the asset are (i) immaterial or (ii) material?
HPHAH CHAPTER 8:
Questions: 12, 14, & 15.
Problems: 8, 9, & 10.