ACCA Financial Reporting Exam Study
Guide
IAS 1 Presentation of Financial Statements - ANSWERStates that a complete set of financial
statements comprises:
- A statement of financial position
- A statement of profit or loss
and other comprehensive income
- A statement of changes in equity
- ...
- The revaluation model: carried at a revalued amount less any
subsequent accumulated depreciation
Journal (assuming revalued amount is greater than original cost):
Dr Non-current assets cost/valuation (revalued amount - cost)
Dr Accumulated depreciation
(eliminate accumulated balance)
Cr Other Comprehensive Income (revaluation surplus)
Depreciation of revalued assets - ANSWER✔✔- Depreciation must be charged, based on valuation less
residual value, over the remaining useful life of the asset
- The whole charge must go to the statement of profit or
loss for the year
- An annual reserves transfer
may be made, from revaluation surplus to retained earnings, for the additional depreciation charged on
the revalued
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