Acca financial Accounting (FA) Study Text ac ca (FA)

Illustration 1 – Revaluation of non-current assets 

 

Vanguard owns land which originally cost $250,000. No depreciation has 

been charged on the land in accordance with IAS 16. Vanguard wishes to 

revalue the land to reflect its current market value, which it has been 

advised is $350,000. 

How is this reflected in the financial statements? 

 

 

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Non-current assets: disposal and revaluation 

148

 

KAPLAN PUBLISHING

 

 

Solution to Illustration 1 

 

The land is currently held at cost of $250,000. This needs to be increased 

by $100,000 to reflect the new valuation of $350,000. Therefore the 

following is required: 

Statement of profit or loss and other comprehensive income: 

Other comprehensive income – item that will not be reclassified in 

subsequent accounting periods: 

Revaluation surplus in the year $100,000