See the information from AFS11-1. The statement of comprehensive income is stated as: One of the major

Question:

See the information from AFS11-1. The statement of comprehensive income is stated as:

One of the major differences between IFRS and U.S. GAAP is the revaluation of property, plant and equipment (primarily it includes the revaluation of rigs). Challenger revalued its assets in 2008 but not in 2007. The gross increase in fair value of the rigs in 2008 was an increase of $20,481,823.

Required:
A. How often must a company revalue property, plant and equipment if it uses the revaluation model?
B. Explain the most likely reason for the difference between the $15,378,561 change in the revaluation reserve and $20,481,823 (gross increase in rigs). Prepare the journal entry to record the revaluation in 2008. Show where each account used in the journal entry should be reported in the financial statements.
C. Which financial statements would be affected if, during 2009, the fair value of the PPE dropped by $25,000,000? Show the dollar amount and the direction of the change for each statement, assuming the reappraised assets to be, on average, 30% depreciated at the end of2009.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...