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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Kaplan: Ch 6 – Question 2 – GoodWine
Hi Chris,
Good vine accounts for for land using the revaluation model and all other classes of assets using the cost model.
30th June X1 – has Grape Vine with Carrying Value of £300,000. 20 yr Dep. The FAIR VALUE of the Grape vine is £500,000.
30th June X2 – Grape with FV of £100,000 have been harvested. Grapes left have a Fair Value of £520,000.
Why is the correct treatment per the question not to recognise a gain of £200,000 (500-300) on 30th June X1? Or Even a gain of £235,000 (520-285) If it was revalued on 30 June X2?
Instead the answer ignores the gain from the carrying value and only recognises a gain of £20,000 (520-500) ?
Thank you,
Cian
Hi,
At June X1 the asset would have been revalued to the 500, so for the next valuation of 520, we compare it to its previous valuation of 500.
Thanks