Reference no: EM133002855
Problem 1: When a balance is carried in an "asset revaluation surplus" account in relation to an asset that has been derecognized, it is acceptable under PAS 16 to?
a) Transfer the balance to retained earnings.
b) Transfer the balance to "share capital" account.
c) Transfer the balance to a provision account for future asset revaluations.
d) Recognize the balance in profit or loss of the period in which the asset was derecognized.
Problem 2: Which statement is incorrect regarding the change in an asset's carrying amount as a result of revaluation?
a) The increase shall be recognized in other comprehensive income and accumulated in equity under the heading of revaluation surplus.
b) The increase shall be recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss.
c) The decrease shall be recognized in other comprehensive income.
d) The decrease shall be recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset.
Problem 3: When an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment (PPE), which of the following statements is correct?
a) Revaluation of property, plant and equipment must be made at least every three years.
b) When an asset is revalued, the entire class of property, plant, and equipment to which the asset belongs must be revalued.
c) Increases in an asset's carrying value as a result of the first revaluation must be recognized as a component of profit or loss.
d) When an asset is revalued, individual assets within a class of property, plant, and equipment to which that asset belongs can be revalued.
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