An asset has a book value of $120, accumulated depreciation of $20, and a recoverable amount of
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An asset has a book value of $120, accumulated depreciation of $20, and a recoverable amount of $90. Assume that the previous increase was $10. (Under revaluation model … )
Write off the book value to carrying amount:
Dr. Accum. depend on 20
Cr Asset 20
Reverse previous increase through impairment loss:
Dr. Asset revaluation surplus (OCI) 7
Dr. Deferred tax liability 3
Cr Asset 10
Can someone tell me why we need to reverse the previous increase through impairment loss, and why there is Deferred tax liability?
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date: