On January 1, 2011, FALLACIOUS MISLEADING Co. acquired a building for ₱4,000,000. The asset is depreciated using the straight line method over an estimated useful life of 10 years. On January 1, 2016, the building was estimated to have a recoverable amount of ₱1,600,000. Consequently, impairment loss was recognized on that date. There was no change in the estimated useful life. On January 1, 2019, the building was estimated to have a new recoverable amount of ₱2,400,000 and a remaining useful life of 3 years. The building is measured under the revaluation model. How much of the impairment reversal is recognized in profit or loss? a. 160,000 b. 1,760,000 c. 1,600,000 d. 0 How much of the impairment reversal is recognized in equity? a. 160,000 b. 1,760,000 c. 1,600,000 d. 0
On January 1, 2011, FALLACIOUS MISLEADING Co. acquired a building for ₱4,000,000. The asset is depreciated using the straight line method over an estimated useful life of 10 years. On January 1, 2016, the building was estimated to have a recoverable amount of ₱1,600,000. Consequently, impairment loss was recognized on that date. There was no change in the estimated useful life. On January 1, 2019, the building was estimated to have a new recoverable amount of ₱2,400,000 and a remaining useful life of 3 years. The building is measured under the revaluation model. How much of the impairment reversal is recognized in profit or loss? a. 160,000 b. 1,760,000 c. 1,600,000 d. 0 How much of the impairment reversal is recognized in equity? a. 160,000 b. 1,760,000 c. 1,600,000 d. 0
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 76P
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Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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On January 1, 2011, FALLACIOUS MISLEADING Co. acquired a building for ₱4,000,000. The asset is depreciated using the straight line method over an estimated useful life of 10 years.
On January 1, 2016, the building was estimated to have a recoverable amount of ₱1,600,000. Consequently, impairment loss was recognized on that date. There was no change in the estimated useful life.
On January 1, 2019, the building was estimated to have a new recoverable amount of ₱2,400,000 and a remaining useful life of 3 years. The building is measured under the revaluation model.
How much of the impairment reversal is recognized in profit or loss?
a. 160,000 b. 1,760,000 c. 1,600,000 d. 0
How much of the impairment reversal is recognized in equity?
a. 160,000 b. 1,760,000 c. 1,600,000 d. 0
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