revaluation deficit/impairment
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
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Question
On January 1, 2020, G Corp. purchased a unit of equipment for P20,000,000. The asset is estimated to have a useful life of 20 years with no residual value.
On December 31, 2021, G Corp. gathered information concluding that the asset’s sound value increased to P36,000,000. However, two years after, on December 31, 2023, the fair value of the equipment dropped to P20,000,000. The entity also revised its remaining useful life to 10 years.
- How much is the revaluation surplus to be recognized on December 31, 2021?
- How much is the revaluation deficit/impairment loss to be recognized on the Income Statement as of December 31, 2023?
- How much is the
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