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bella456
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Hi Chris i wanted to know how to the non current asset for sale when it has been revalued
For example, property plant and equipment measured using the revaluation model with a carrying amount of $10,000 met the criteria of an asset held for sale when the fair value of the asset was $12,000 and the costs to sell were $3,000.How do we do this and what are the double entries?. It would mean alot to me if you explain it in detail?
Thank you
From benu
P2-D2
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Hi Benu,
Sorry not to have seen the question posted.
Prior to the transfer we revalue the asset to the $12,000 (DR PPE 2,000 CR Revaluation Surplus 2,000). It is then transferred and held at the lower of the carrying value (12,000) and the fair value less costs to sell (9,000 = 12,000 – 3,000).
The asset is therefore held at 9,000 (CR PPE 3,000 DR Revaluation Surplus 2,000 (can only use this amount as that is all that is currently held in there) Dr P or L 1,000)
Thanks
bella456
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