Question 1

**Section A**

AgriYield operates a large-scale commercial farm. On 1 January 20X4, AgriYield purchased a specialized harvester for $120,000, with an estimated useful life of 10 years and nil residual value. The company uses the revaluation model for this class of asset. On 31 December 20X5, the harvester was revalued to $104,000.

What is the amount to be recognized in Other Comprehensive Income (OCI) as a revaluation surplus on 31 December 20X5?

Accepted Answer

Calculate the carrying amount of the asset at the date of revaluation (Cost - Accumulated Depreciation). Then compare this carrying amount to the revalued amount.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting to deduct the second year's depreciation before calculating the revaluation surplus.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FR — Financial Reporting Practice Exam 5

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