QUESTION 1 Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp 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. Required: Discuss the accounting treatment required in 2018 and 2019 financial statements.
QUESTION 1
Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets
in accordance with IAS 38: Intangible assets. The policy of Polycarp 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.
Required:
Discuss the accounting treatment required in 2018 and 2019 financial statements.
QUESTION 2
E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It
Required:
Account for this grant under the netting off method.
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