IceCap Hotels operates a series of northern European hotels and reports under IFRS. On June 30, 2016,

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IceCap Hotels operates a series of northern European hotels and reports under IFRS. On June 30, 2016, IceCap purchased a hotel for €2,100,000. IceCap reports hotel values on the balance sheet under property, plant, and equipment. The estimated useful life of the hotel is 30 years from the date of purchase. The company uses straight-line depreciation for its hotels. The appraisal value for the hotel (which you can assume is the same as the recoverable amount) was reported as:
Appraisal Date ___________________________Hotel Value
12/31/2016................................................€2,200,000
12/31/2017................................................€1,400,000
12/31/2018................................................€1,700,000
Required:
1. Prepare the journal entries at the end of 2016, 2017, and 2018 to record any changes in value to this hotel asset if IceCap chooses the IFRS cost model to value this property.
2. Prepare the journal entries at the end of 2016, 2017, and 2018 to record any changes in value to this hotel asset if IceCap chooses the IFRS revaluation model to value this property.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial Reporting and Analysis

ISBN: 978-1259722653

7th edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

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