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Impairments – Impairment (specific asset) – ACCA Financial Reporting (FR)


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Comments

  1. Maseketo says

    March 22, 2022 at 6:12 pm

    Hi
    what is the use of General Reserve account?

    When an asset has been impaired can we charge the impaired loss to general reserve before taking the balance to profit or loss statement?

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    • D.papaspyrou says

      June 22, 2022 at 10:15 pm

      Hi . General reserve is referred to as the reserve fund that is created by keeping aside a part of profit earned by the business during the course of an accounting period. In this case revaluation gains.

      If an asset is impaired we can charge the impairment loss to general reserve but only up to the value that the revaluation gains have at the time of the impairment.

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  2. sarrah006 says

    July 19, 2020 at 11:35 am

    hi Sir,
    thank you so much for teaching us i just have one question, why did we deduct 325 as impairment ( OCI ) ? we already used that from the surplus which cancels it off and remaining 50 as impairment why did we deduct 325 from OCI?

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    • irphern says

      July 22, 2020 at 10:09 am

      325 was already in OCI from previous revaluation and subsequent transfer of excess depreciation, at the start of year 20×7, so to net it off at the end of year we first set of 325 of Impairment to OCI and remaining to SPL

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      • sarrah006 says

        July 23, 2020 at 9:51 am

        okay thanks
        i didnt know oci carrys balance as well because i thought even oci is yearly basis

  3. Meloman says

    July 16, 2020 at 3:47 pm

    I like the slogan stick to that and you wont go too far wrong )

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  4. HarshSingh07 says

    July 7, 2020 at 6:18 am

    Sir , should we not first transfer 375 from ppe to impairment and then from impairment to sopl and oci

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  5. karang says

    May 31, 2020 at 8:13 am

    Hi

    Can we not show Impairment at Nil in Other comprehensive income as we had 325 income and Loss of 325 in current year.

    Will this be incorrect representation

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    • mariakurina says

      June 9, 2020 at 9:17 pm

      I don’t think it would be a mistake, but showing Nil could gain some marks. It would show the reviewer that you understand that OCI was some number before, and after entries there’s nothing left.

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  6. yasar89 says

    April 12, 2020 at 5:19 pm

    Hi Cris,
    What is the difference between impairment and revaluation downwards?
    Please explain.
    Thank you.

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    • mariakurina says

      June 9, 2020 at 9:15 pm

      In this case, basically none to my opinion. If it was not stated that they did impairment review, if they just did year-end revaluation and got 600,000, we would do everything the same

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  7. tugcem says

    February 17, 2020 at 7:12 pm

    Hi,
    Why we didn’t put on SFP revaluation surplus?

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    • mariakurina says

      June 9, 2020 at 9:12 pm

      What exactly? There’s a lot going on here and many accounting entries

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  8. aleonard013 says

    February 11, 2020 at 6:39 pm

    Hello
    Just to be sure … so here the « revaluation surplus » will be 0 right ?
    Thanks

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    • mariakurina says

      June 9, 2020 at 9:07 pm

      Hi! Yes, exactly

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  9. Anooshaaziz says

    February 6, 2020 at 3:36 pm

    From where that 50 came in depreciation?

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    • irphern says

      March 13, 2020 at 1:37 am

      it is the depreciation amount that would have been charged had the asset had not been revalued.
      depreciation= 1000/20
      50 per annum

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  10. aarti2407 says

    October 16, 2019 at 11:23 am

    Sir, could you please upload a video on ‘Reversal of Impairment’ as well?

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  11. ali5185 says

    April 27, 2019 at 7:40 am

    Do we have to transfer excess depreciation to retained earnings every year?

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    • P2-D2 says

      May 20, 2019 at 2:30 pm

      We aren’t obliged to do so but it is best practice.

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  12. hrithikgoudar says

    April 20, 2019 at 12:37 pm

    The depreciation charge for the year that was recorded in the Statement of Profit or Loss for the year ended 31st Dec 20×7 should have been 50,000 rather than 75,000. The company wishes to transfer the excess depreciation charge to retained earnings directly from the revaluation surplus reserve.

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    • mariakurina says

      June 9, 2020 at 9:10 pm

      Entries would be:

      Dr Acc depreciation (SFP) 75,000
      Cr Depreciation charge (SPL) 75,000
      Dr Revaluation Surplus (SFP OCI) 25,000
      Cr Retained Earnings (SFP) 25,000

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  13. shafiuahmad says

    April 18, 2019 at 9:41 am

    The sentence below wasn’t use in the solution:
    The company opts to transfer any excess depreciation on the revalued amount to retained earnings.
    I think the 25, 25 excess will not be charged from the surplus. Pls I need more light on that.

    Thank you

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    • MikeLittle says

      April 18, 2019 at 11:59 am

      It’s an optional transfer but generally considered to be ‘best practice’

      OK?

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  14. joelsasi says

    November 10, 2018 at 11:02 am

    Nice explanation .Thank you.

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