Page 28 - FR Integrated Workbook 2018-19
P. 28
Chapter 2
Example 1
Revaluation
An entity revalued its land and buildings at the start of the year to $10 million
($4 million for the land). The property cost $5 million ($1 million for the land)
ten years prior to the revaluation. The total expected useful life of 50 years is
unchanged. The entity's policy is to make an annual transfer of realised
amounts to retained earnings.
Show the effects of the above on the financial statements for the year.
Statement of profit or loss and other comprehensive income (extract)
$000
Depreciation (W1) (150)
Other comprehensive income:
Revaluation gain (W1) 5,800
Statement of financial position (extract)
Non-current assets $000
Land and buildings (W1) 9,850
Equity
Revaluation surplus (SOCIE) 5,730
Statement of changes in equity (extract)
Revaluation
surplus
$000
Balance b/f 0
Revaluation gain (W1) 5,800
Transfer to retained earnings (W2) (70)
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Balance c/f 5,730
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