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ratio analysis and interpretation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › ratio analysis and interpretation

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 15, 2021 at 9:16 am #625316
    deekshabee
    • Topics: 24
    • Replies: 20
    • ☆

    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?

    June 19, 2021 at 7:45 am #625768
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6119
    • ☆☆☆☆☆

    Hi,

    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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    Posts
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