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How much can be recognized as revaluation surplus on january

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Reference no: EM132775540

GGGG Corporation acquired a patent right on July 1, 2016 for P250,000. The remaining legal life on the date of purchase is 15 years. However, due to rapidly changing technology, management estimates that the remaining useful life on July 1, 2016 is only 5 years.

At January 1, 2017, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated recoverable amount of P75,000. Amortization will be taken over 3 years from that point.

On January 1, 2019, having perfected the related production process, independent valuers certified that the asset has a fair value of P300,000. Furthermore, the estimated useful life is now believed to be 6 more years.

Problem 1: How much can be recognized as gain on impairment recovery is 2019?

Problem 2: How much can be recognized as revaluation surplus on January 1, 2019?

Problem 3: Carrying amount of patent at the end of the year 2019?

Reference no: EM132775540

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