Hello,
Q. If a company wished to maintain the carrying amount in the financial statements of its
non-current assets, which of the following would it be unlikely to do?
?? Enter into a sale and short-term leaseback
?? Account for asset-based government grants using the deferral method
?? Revalue its properties
?? Change the depreciation method for new asset acquisitions from 25% reducing balance to
ten years straight line
the answer is option a and that is fine with me but what about option c i.e. revalue the properties. I mean if a co. wants to maintain its C.V. then why would it revalue its properties?
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ratio analysis and interpretation
5y ago#1Hi,
Great to hear from you again. There is a key difference between the words maintain and increase. By revaluing the properties then the value of the NCA would increase and it is not therefore maintaining it at the same/similar value.
Thanks
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