Reference no: EM132604426

Question - Good Wine is a company that grows and harvest grapes. Grapes vines, which produce a new harvest of grapes each year, are typically replaced every 30 years. Harvested grapes are sold to wine producers. Concerning property, plant and equipment, Good Wine accounts for land using the revaluation model and all other classes of assets using the cost model.

On 30 June 20x1, its grape vines had a carrying amount of $300,000 and a remaining useful life of 20 years. The grapes on the vines, which are generally harvested in August each year, had a fair value of $500,000. The land used for growing the grapes vines had a fair value of $2m

On 30 June 20x2, grapes with a fair value of $100,000 were harvested early due to unusual weather conditions. The grapes left on the grape vines had fair value of $520,000. The land had a fair value of $2.1m.

All selling cost are negligible and should be ignored.

Required - Briefly discuss the accounting treatment of the above in the financial statement of Good Wine For the year ended 30 June 20x2.