Autumn Ltd (Autumn) purchased an item of equipment on 1 July 2016 for $3,000,000. At that time the useful life of the equipment was assessed to be 10 years, with no residual value. Autumn applies the cost model to its equipment.

On 30 June 2021 the recoverable amount of the equipment was assessed to be $1,300,000. Accordingly, an impairment loss of $200,000 was recognised. The useful life of the equipment remained at five years.

On 30 June 2024 (three years later) the equipment’s recoverable amount is $650,000.

How should Autumn account for the event on 30 June 2024?

Group of answer choices

Recognise a gain on revaluation of $50,000 in the Income Statement.

Recognise a gain on revaluation of $50,000 in Other Comprehensive Income

Recognise an impairment loss reversal of $130,000.

Recognise an impairment loss reversal of $80,000

Answer rating: 100% (QA)

Step 12 The answer is D Recognise an impairment loss reversal of 80000 Explanation The essential rul... View the full answer