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.
Ask the Tutor ACCA FR
Statement of Changes in Equity
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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