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hi,
Sir please explain me the double entry of revaluation reserve of 1000 in question no 1 of this exercise. How did you put that?
Can there be a single compound entry instead of these entries?The $1,000 is a response to the IASB encouragement to make an annual transfer from Revaluation Reserve to Retained Earnings through other comprehensive income and through the Statement of Changes in Equity
The $1,000 is the excess depreciation that the Statement of Profit or Loss has “suffered” purely as a result of the revaluation
Nowhere in the question is this asked for and, in the exam, your examiner will typically guide you as to whether or not to make this transfer
“Can there be a single compound entry instead of these entries?” – well, of course it can. And may the Good Lord help you! If I had done a single composite entry, I would have been inundated with questions – “Where does this figure come from?” and “How did you arrive at that figure?”
And the same goes for the marker when your exam is marked. Make one tiny error so your composite figure is incorrect and you lose potentially all the marks that that particular working was worth
But if you’re happier with just one composite figure …. fine 🙂
OK?
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