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ch11 - Revaluation-Appendix
ch11 - Revaluation-Appendix
APPENDIX 11A
Equipment
LEARNING OBJECTIVE 7
Illustrate revaluation accounting procedures.
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Revaluation of Property, Plant, and
APPENDIX 11A
Equipment
Land 120,000
Unrealized Gain on Revaluation—Land 120,000
(€520,000 − €400,000)
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Revaluation—2019: Valuation Increase
ILLUSTRATION 11A.1
Summary of Revaluation—2019
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Revaluation—2020: Decrease below Cost
ILLUSTRATION 11A.2
Summary of Revaluation—2020
Land 35,000
Unrealized Gain on Revaluation—Land 15,000
Recovery of Impairment Loss 20,000
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Revaluation—2021: Recovery of
Impairment Loss
ILLUSTRATION 11A.3
Summary of Revaluation—2021
Cash 415,000
Land 415,000
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Revaluation—2021: Recovery of
Impairment Loss
ILLUSTRATION 11A.3
Summary of Revaluation—2021
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Revaluation of Depreciable Assets
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Revaluation—2019: Valuation Increase
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Revaluation—2019: Valuation Increase
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Revaluation—2020: Decrease below
Historical Cost
Under IFRS, Nokia may transfer from AOCI the difference between
depreciation based on the revalued carrying amount of the
equipment and depreciation based on the asset’s original cost to
retained earnings.
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Revaluation—2020: Decrease below Cost
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Revaluation—2020: Decrease below Cost
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Revaluation—2020: Decrease below Cost
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Nokia transfers the difference between depreciation based on the
revalued carrying amount of the equipment and depreciation based
on the asset’s original cost from AOCI to retained earnings.
Depreciation based on the original cost was €200,000 (€1,000,000
÷ 5) and on fair value is €190,000.
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Revaluation—2021: Recovery of Loss
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Revaluation—2021: Recovery of Loss
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ILLUSTRATION 11A.6
Summary of Revaluation—2021
Cash 450,000
Equipment 450,000
Nokia does not record a gain or loss because the carrying amount
of the equipment is the same as its fair value.
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ILLUSTRATION 11A.6
Summary of Revaluation—2021
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Copyright
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