CAF-01 (FAR-1) Property, Plant and Equipment (IAS-16)

Lecture 9 (IAS-16) Lecture 9 (Overall)

Revaluation of PPE
Classwork
Q.1)
Asset purchased on 01-01-12
Cost of Asset 500
Useful life 20 Years
Revaluation Details:
01-01-14 800
01-01-16 250
01-01-18 600
Required: Prepare Journal entries from 2012 to 2018.
Q.2)
Asset Purchased on 1-07-08
Cost Rs.600
Useful Life 30 Years
It is revalued on 1.7.22 at Rs.800
Required: Prepare journal entries of 2023 (i.e. for the year ended 30.06.23)
Homework:
Q.1) Shahzad Textile Mills Limited (STML) purchased a plant for Rs. 500 million on 1 July 2010. The plant has
an estimated useful life of 10 years and no residual value.
STML uses revaluation model for subsequent measurement of its property, plant and equipment and accounts
for revaluations on net replacement value method. The details of revaluations performed by an independent
firm of valuers are as follows:
Revaluation date Fair value
1 July 2011 Rs. 575 million
1 July 2012 Rs. 390 million
1 July 2013 Rs. 380 million
Required: Prepare journal entries to record the above transactions from the date of acquisition of the plant to the
year ended 30 June 2014. (Ignore tax implications) (15)
{Autumn 2014, Q# 4, CAF-05}

Umair Sheraz Utra, ACA Page |1