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1. Please tell me why the useful lives of property is 16 yrs after revaluation? and how to distinct the useful live between 16 yrs and 20 yrs in question??
2. I read Answer instruction of Ques 2 in Dec 2011 Exam and recognise:
Why Revaluation Reserve on SoFP is $5,600,000 whereas I thought it is $8,000,000?Thanks and best regards
Leasehold property cost 50,000, accumulated amortisation is 10,000, original estimated useful life is 20 years
Therefore there is only 16 more years left to amortise
“Why Revaluation Reserve on SoFP is $5,600,000 whereas I thought it is $8,000,000?”
Do you think it might have anything to do with the deferred tax on the revaluation at 30%?
Yes, please explain to me, can you show me transaction entries when recognised deferred tax?
The carry forward liability on the deferred tax account increases by 2.4
But that 2.4 relates to a revaluation so there is a credit entry in the deferred tax account of 2.4 and the debit entry goes to the revaluation reserve
Have you tried the mini exercises towards the end of the course notes?
There are 16 exercises ALL lifted from past examination questions starting on page 217
Do those and will never need to write to me again with reference to deferred tax!
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