20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for December 2024 exams.
Get your discount code >>

Premier, December 2010

This topic has 1 reply, 2 voices, and was last updated 12 years ago by MikeLittle.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
July 24, 2012 at 3:51 pm #53849
perist1984
Participant
- Topics: 14
- Replies: 18
There is fair value adjustmen of PPE in the amount of 1,2 m $ (less than the carrying amount). Why is there no effect of this FVA in the Statement of comprehensive income? (ie wouldn’t it be correct to increase cost of sales by 1,2 m $)
July 24, 2012 at 5:59 pm #102115
MikeLittle
Keymaster
- Topics: 27
- Replies: 23200
no, the adjustment is to debit Income Statement ( Comprehensive Income ) and credit the asset.
The Income Statement is also affected each subsequent year because the depreciation charge ( for consolidation purposes ) will be based on the reduced fair value
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.