Larkspur Properties Ltd. is a publicly listed company following IFRS. Assume that on December 31, 2023, the carrying amount of land on the statement of financial position (SFP) is $500,000. Management determines that the land's value in use is $430,000 and that the fair value less costs to sell is $395,000. (b) Your answer is partially correct. Due to an economic rebound in the area, by the end of the following year the land has a value in use of $555,000 and fair value less costs of disposal of $470,000. Prepare the journal entry required, if any, to record the increase in its recoverable amount. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation December 31, 2024 Accumulated Impairment Losses - Land Recovery of Loss from Impairment Debit 40000 Credit 40000 I
Larkspur Properties Ltd. is a publicly listed company following IFRS. Assume that on December 31, 2023, the carrying amount of land on the statement of financial position (SFP) is $500,000. Management determines that the land's value in use is $430,000 and that the fair value less costs to sell is $395,000. (b) Your answer is partially correct. Due to an economic rebound in the area, by the end of the following year the land has a value in use of $555,000 and fair value less costs of disposal of $470,000. Prepare the journal entry required, if any, to record the increase in its recoverable amount. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation December 31, 2024 Accumulated Impairment Losses - Land Recovery of Loss from Impairment Debit 40000 Credit 40000 I
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Larkspur Properties Ltd. is a publicly listed company following IFRS. Assume that on December 31, 2023, the carrying amount of land
on the statement of financial position (SFP) is $500,000. Management determines that the land's value in use is $430,000 and that the
fair value less costs to sell is $395,000.
(b)
Your answer is partially correct.
Due to an economic rebound in the area, by the end of the following year the land has a value in use of $555,000 and fair value
less costs of disposal of $470,000. Prepare the journal entry required, if any, to record the increase in its recoverable amount.
(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)
Date
Account Titles and Explanation
December
31, 2024
Accumulated Impairment Losses - Land
Recovery of Loss from Impairment
Debit
40000
Credit
40000
I
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