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Statement of Changes in Equity

RRizwan9y ago
Hi, I need help in the following matter relating to Chapter 3 Example 1 of F7 Notes (Page 10). In point (iii) it is stated that, "A non-current asset with a carrying value of $130,000 was written down to $95,000. The impairment occurred as a result of general price changes. The revaluation surplus account contains $25,000 relating to this asset." The impairment is of $35,000. In solution to this point, only $25,000 has been taken into account, which has been subtracted from Revaluation Surplus. Why the other $10,000 is not taken into account as impairment loss and subtracted from retained earnings? Is this related to the reason in point (iii) that the impairment occurred as a result of general price changes? Thanking in advance.
MikeLittleMikeLittleTutor9y ago#1
The question specifically asks only for the Statement of Changes in Equity Only $25,000 of the $35,000 impairment will be shown in the statement The other $10,000 is deducted in arriving at the $421,000 profit after taxation So it has been deducted from statement of profit or loss already
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