Revaluations permitted by accounting standards

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Reference no: EM133208639

State whether the following assets may be revalued. Prepare journal entries for any revaluations permitted by accounting standards (you can ignore taxation effects). Assume that each item listed below represents a separate class of assets.

(a) A company has developed a masthead for its newspaper to the point where it is a very valuable asset. Although the masthead is not currently recognised, management believes it could be sold for at least $3 million.

(b) A company purchased a publishing title two years ago for $1.2 million when another publisher went into liquidation. The book has been very successful, and management believes that it could probably sell for $1.5 million if they ever put it on the market.

(c) A company acquired a franchise for an ice-cream stand at a beach at a cost of $100 000. There is great demand for this type of franchise as evidenced by recent sales of equivalent franchises at other beaches. The current market price for such a franchise is $200 000.

(d) A company has deferred development costs of $520 000 and the estimated recoverable amount for the development project is $860 000. 9 LO 8.2, 19 8.3, 2 8.4. 2 8.5, 2 8.7 ..

Reference no: EM133208639

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