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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Highland co
Dear sir,
In the BPP workbook, there is a question named Highland. I have several doubts in the question
In this qn, there is an adjustment that says this
“The property, plant and equipment of Buchan on 30 November 20X7 was valued at $500,000 (book value $350,000) and was acquired in April 20X7. The property, plant and equipment has a total useful life of ten years. Buchan has not adjusted its accounting records to reflect fair values”
In the anser the gain on revaluation 150 is not included in the total comprehensive income but rather in the net assets as a fair balue adjustment. Could you explain why?
Group is probably using cost model. So no obligation to revalue except for purpose of consolidation as FV adjustment – will increase PPE and reduce goodwill. No impact on OCI.
Extra depreciation charged in subsequent years will reduce group P&L.