Learning Objectives: Students will be able to learn the basic principles of revaluation as per IAS 16 on Property, Plant and Equipment.
Scenario:
HXN Ltd. - a textile manufacturing firm located in Karachi has the policy to recognize its fixed assets (tangible) initially at cost and subsequently at cost less accumulated depreciation and impairment losses. Depreciation on the fixed assets is charged appropriately to write off the cost over estimated useful life of the assets.
In the financial year 2013-14, the company decided to revalue its plant assets. The data regarding this revaluation is as follows:
Gross Carrying Amount (Rs.)
|
Accumulated Depreciation (Rs.)
|
Net Carrying Amount (Rs.)
|
Revalued Amount (Rs.)
| |
| Plant |
7,460,000
|
230,000
|
7,230,000
|
9,950,000
|
| Machinery |
2,350,000
|
440,000
|
1,910,000
|
3,050,000
|
Requirement:
Determine the revalued gross carrying amount, revalued accumulated depreciation, revalued net carrying amount and revaluation surplus supporting necessary workings, where necessary.
idea solution :
For Plant:
Revalued gross carrying amount,
(7,460,000*9,950,000/7,230,000) = 10,266,528.35
Aumulated Depreciation
(230,000*9,950,000/7,230,000) = 316,528.35
Revalued net carrying amount = 950,000.00
For Machinery:
Revalued gross carrying amount,
(2,350,000*3,050,000/1,910,000) = 3,752,617.8
Accumulated Depreciation
(440,000*3,050,000/1,910,000)= 702,617.8
Revalued net carrying amount = 3,050,000.00
revaluation surplus can not be calculated because the percentage of depreciation under written down value/useful life of assets is not given in question, if any body have any idea how to calculate without that please reply.
Learning Objectives: Students will be able to learn the basic principles of revaluation as per IAS 16 on Property, Plant and Equipment.
Scenario:
HXN Ltd. - a textile manufacturing firm located in Karachi has the policy to recognize its fixed assets (tangible) initially at cost and subsequently at cost less accumulated depreciation and impairment losses. Depreciation on the fixed assets is charged appropriately to write off the cost over estimated useful life of the assets.
In the financial year 2013-14, the company decided to revalue its plant assets. The data regarding this revaluation is as follows:
Requirement:
Determine the revalued gross carrying amount, revalued accumulated depreciation, revalued net carrying amount and revaluation surplus supporting necessary workings, where necessary.
Important Instructions:
1. The GDB will remain open for 3 working days/ 72 hours.
2. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
3. Obnoxious or ignoble answer should be strictly avoided.
4. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
For Detailed Instructions please see the GDB Announcement
Read more at http://vustudents.ning.com/group/mgt401financialaccountingii/forum/topics/mgt-401-financial-accounting-ii-gdb-no-01-spring-2014-due-date?xg_source=activity#oeKbE6qsBOKVgWPi.99
Scenario:
HXN Ltd. - a textile manufacturing firm located in Karachi has the policy to recognize its fixed assets (tangible) initially at cost and subsequently at cost less accumulated depreciation and impairment losses. Depreciation on the fixed assets is charged appropriately to write off the cost over estimated useful life of the assets.
In the financial year 2013-14, the company decided to revalue its plant assets. The data regarding this revaluation is as follows:
Gross Carrying Amount (Rs.)
|
Accumulated Depreciation (Rs.)
|
Net Carrying Amount (Rs.)
|
Revalued Amount (Rs.)
|
|
| Plant |
7,460,000
|
230,000
|
7,230,000
|
9,950,000
|
| Machinery |
2,350,000
|
440,000
|
1,910,000
|
3,050,000
|
Determine the revalued gross carrying amount, revalued accumulated depreciation, revalued net carrying amount and revaluation surplus supporting necessary workings, where necessary.
Important Instructions:
1. The GDB will remain open for 3 working days/ 72 hours.
2. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
3. Obnoxious or ignoble answer should be strictly avoided.
4. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.
For Detailed Instructions please see the GDB Announcement
Read more at http://vustudents.ning.com/group/mgt401financialaccountingii/forum/topics/mgt-401-financial-accounting-ii-gdb-no-01-spring-2014-due-date?xg_source=activity#oeKbE6qsBOKVgWPi.99
