Chapter 8 Non-current Assets Revaluation

Jul 17, 2026

Uploaded by Violet

This document presents a sequence of accounting questions and scenario-based calculations focused on non-current assets revaluation and depreciation. It covers how revaluation surplus is determined for property after price increases, how depreciation is computed under different methods and timing rules (straight-line and reducing balance), and how revaluation affects future depreciation charges. It also addresses disclosure requirements under IAS 16 for tangible non-current assets and explains what items belong in the reconciliation of carrying amounts. Finally, it tests definitions of current assets and related inclusion criteria.

LanguageEnglish

CategoryResearch & Report

FormatDOCX

Pages6

Reading Time15 min

AccessFree to download

Chapter 7: Non-current assets: Revaluation BPP – Revision Kit 7.7 A company bought a property four years ago on 1 January for $ 170,000. Since then property prices have risen substantially and the property has been revalued at $210,000. The property was estimated as having a useful life of 20 years when it was purchased. What is the balance on the revaluation surplus reported in the statement of financial position? A $210,000 B $136,000 C $74,000 D $34,000 7.9 A company's policy is to charge depreciation on plant and machinery at 20% per year on cost, with proportional depreciation for items purchased or sold during a year. The company's plant and machinery at cost account for the year ended 30 September 20X3 is shown below. PLANT AND MACHINERY – COST $ $ 20X2 20X3 1 Oct Balance 200,000 30 Jun Transfer disposal account 40,000 30 Sep Balance 210,000 20X3 1 Apr Cash-purchase of plant 50,000 250,000 250,000 What should be the depreciation charge for plant and machinery (excluding any profit or loss on the disposal) for the year ended 30 September 20X3? A $43,000 B $51,000 C $42,000 D $45,000 7.10 The plant and machinery at cost account of a business for the year ended 30 June 20X4 was as follows: PLANT AND MACHINERY – COST $ $ 20X3 20X3 1 Jul Balance 240,000 30 Sep Transfer disposal account 60,000 20X4 20X4 1 Jan Cash – purchase of plant 160,000 30 Jun Balance 340,000 400,000 400,000 The company's policy is to charge depreciation at 20% per year on the reducing balance basis, with proportionate depreciation in the years of purchase and disposal. What should be the depreciation charge for the year ended 30 June 20X4? A $68,000 B $64,000 C $61,000 D $55,000 7.16 Gusna Co purchased a building on 31 December 20X1 for $750,000. At the date of acquisition, the useful life of the building was estimated to be 25 years and depreciation is calculated using the straight-line method. At 31 December 20X6, an independent valuer valued the building at $1,000,000 and the revaluation was recognised in the financial statements. What is the depreciation charge on the building for the year ended 31 December 20X7? A $40,000 B $50,000 C $30,000 D $42,500 7.18 Which of the following should be disclosed for tangible non-current assets according to IAS 16 Property, plant and equipment? 1 Depreciation methods used and the total depreciation allocated for the period 2 A reconciliation of the carrying amount of non-current assets at the beginning and end of the period 3 For revalued assets, whether an independent valuer was involved in the valuation 4 For revalued assets, the effective date of the revaluation A 1, 2 and 4 only B 1 and 2 only C 1, 2, 3 and 4 D 1, 3 and 4 only 7.19 Which of the following should be included in the reconciliation of the carrying amount of tangible non-current as

Jul 17, 2026

Uploaded by Violet