Question

1)

Which statement relating to revaluations of non-current assets is not true?

Select one:

a. A revaluation increase is regarded as income to be added to the firm's profit for the year.

b. A revaluation decrease should be included as a reduction in profit.

c. Before assets are revalued any existing accumulated depreciation must be written off against the asset account.

d. Future depreciation charges will be based on the revalued carrying amount of the asset.

2)

Which is the true statement?

Select one:

a. An initial revaluation decrease should be treated as a debit to the revaluation surplus reserve.

b. A revaluation decrease should occur if a non-current asset's carrying amount is less than its fair value.

c. An initial revaluation decrease should be treated as a debit against the current period's profit or loss.

d. An initial revaluation decrease should be disclosed in the profit report as a reduction in other comprehensive income.

3)

Carrying amount of equipment is what type of account?

Select one:

a. Negative expense

b. Expense

c. Negative asset

d. Asset

4)

How many of these are requirements of IAS 16/AASB 116?
- An entire class of non-current assets must be revalued together.
- If the revaluation model is adopted non-current assets should be revalued to either fair value or the value in use.
- Before a depreciable asset is revalued accumulated depreciation should be written back to the asset account.

Select one:

a. 1

b. 0

c. 2

d. 3

Answer 1

1. - a) A revaluation increase is regarded as income to be added to the firm's profit for the year.

2.- b) A revaluation decrease should occur if a non current assets,s carrying amount is less than its fair value.

3.- d) Asset

4.- a) An entire class of non current assets must be revalued together.