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Tangible Non-current assets

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Tangible Non-current assets

  • 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
  • April 8, 2021 at 12:19 pm #616369
    suleymanabuzerli
    Member
    • Topics: 84
    • Replies: 32
    • ☆☆

    Croft acquired a building with a 40?year life for its investment potential for $8 million on 1
    January 20X3 At 31 December 20X3, the fair value of the property was estimated at $9 million
    with costs to sell estimated at $200,000.
    If Croft Co uses the fair value model for investment properties, what gain should be
    recorded in the statement of profit or loss for the year ended 31 December 20X3?
    $_______________ ,000

    Dear Sir,please help to clarify this issue

    at 31-dec-2013

    Carrying amount 7.8 million

    and revaluation= 9million

    surplus 1.2 million general gain
    but
    this question doesn’t ask net gain

    why answer is 1 million?

    April 10, 2021 at 8:50 am #616632
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6440
    • ☆☆☆☆☆

    Hi,

    The IP is revalued to fair value (the costs to sell are ignored) of $9 million. If it was originally recognised at $8 million then there is an increase of $1 million.

    The costs to sell are given so as to trick you in to thinking that they are to be used when they aren’t.

    Thanks

  • Author
    Posts
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