Pg 12 question Ex 3 Lecture Notes

Ddragonara013y ago

In question Ex 3 one is asked to show the events for the year in the Statement of Changes in Equity.

The asnswer is shown in pg 149. What I cannot understand is how the Surplus on property revaluation (25) is worked out. In the question it says that a non-current asset with a carrying value of 130k was written down to 95k. The difference between the two is 35k. ???

Can someone help please..

Former user13y ago#1

Sorry I don't have book to check the details of the question EX 3 but I think the above details are not right because revalution surplus is created only when the carrying amount is less than the revalued amount. In the above case the non current asset carrying value 130k is reduced to 95k so thats impariment loss, which is write off to income statement or if you have revalution surplus than the loss is first written off against any balance available in the revaluation surplus and if the loss exceeds the revaluation surplus balance of the same asset the difference is charged to income statement as impairment loss.

Ssarmadkhalid4513y ago#2

Dear ,
As in first adjustment 105 rev.reserve, from this the impairment loss will be adjusted and its 25 rev.reserve took to PnL as impairment loss...

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