Question

At the end of the first year of operations, Brianna Company chose to use the revaluation...

At the end of the first year of operations, Brianna Company chose to use the revaluation framework allowed under IFRS. Brianna’s ledger shows Equipment $480,000 and Accumulated Depreciation-Equipment $60,000. Prepare journal entries to record the following.

(a) Independent appraisers determine that the plant assets have a fair value of $468,000.

(b) Independent appraisers determine that the plant assets have a fair value of $400,000.

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Homework Answers

Answer #1

Answer to a)

Carrying Amount of equipment = Cost - Accumulated Depreciaton

= 480,000 - 60,000

= 420,000

Fair Value = 468,000

Revaluation Surplus = Fmv - Carrying Amount

= 480,000 - 468,000

= 48,000

Journal entry

Equipment 48,000
Revaluation Surplus 48,000

Answer to b)

Cost Amount of equipment = 480,000

Accumulated depreciation = 60,000

Fair Value = 400,000

Impairment Loss = Cost - Accumulated Depreciation -Fair value

= 480,000 - 60,000 - 400,000

= 20,000

Journal entry

Impairment Loss 20,000
Accumulated Depreciation 60,000
Equipment 80,000
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