What is the best way to approach these problems with G/L under IFRS? Is there a set way to look at this? Is my logic to solve correct? Trying to apply it for others in the same scenario but I want to make sure the way I am doing it is not just luck.
On December 31, Year 1, an entity adopted the IFRS revaluation model for reporting its long-term assets and revalued a patent with a carrying value of $85,000 and a 10 year life to its fair value of $75,000. On December 31, Year 2, before recording any amortization, the entity determined that the patent had a fair value of $90,000. In its December 31, Year 2 financial statements, the entity will report a revaluation gain of:
…CV………………..FMV
85,000…….>……..75,000
= (10,000) loss
Then compare FMV's
…FMV………………..FMV
85,000…….<……..90,000
+Gain 5,000
Answer: 10,000 on the income statement and $5,000 in other comprehensive income.
Same logic with this??
On December 31, Year 1, Classic Company revalued a patent under IFRS. On that date, the patent had a carrying value of $250,000, a fair value of $200,000, and a remaining useful life of 5 years. On December 31, Year 2, the patent's fair value was $175,000. In its December 31, Year 2 financial statements, Classic will report a current period revaluation:
Thanks!
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