Francis-Toure (FT) Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of FT is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000. Discuss the accounting treatment required in 2018 and 2019 financial statements.
Francis-Toure (FT) Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of FT is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000. Discuss the accounting treatment required in 2018 and 2019 financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Francis-Toure (FT) Ltd adopts revaluation model for subsequent measurement of its
intangible assets in accordance with IAS 38: Intangible assets. The policy of FT is to
revalue its intangible asset at the end of each year. An intangible asset with an estimated
useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to
GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on
that date. As at 31 December 2019, the asset was revalued at GH¢32,000.
Discuss the accounting treatment required in 2018 and 2019 financial statements.
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