Long-lived Superannuation Plan provides the following information regarding its assets and receipts for the year ended 30 June 2002: During the period,land acquired before 30 June 2001 was sold.The land had a cost of $1 million,a market value at 30 June 2001 of $2 million,and was sold for $2.8 million.What is the revenue of the superannuation plan for the period in accordance with AAS 25?

Question

Long-lived Superannuation Plan provides the following information regarding its assets and receipts for the year ended 30 June 2002:  During the period,land acquired before 30 June 2001 was sold.The land had a cost of $1 million,a market value at 30 June 2001 of $2 million,and was sold for $2.8 million.What is the revenue of the superannuation plan for the period in accordance with AAS 25?

Quizplus · Accepted Answer

According to AAS 25, gains or losses on the sale or disposal of a long-term asset should be recognized in the statement of financial performance. Therefore, the gain on the sale of land, which is ($2.8 million - $1 million) = $1.8 million, should be included in the revenue of the superannuation plan. The other receipts and asset values provided do not need to be included in the revenue calculation. Thus, the revenue of the superannuation plan for the period is $3,678,000 ($1.8 million gain on land sale + $1,878,000 receipts from other sources).

Long-Lived Superannuation Plan Provides the Following Information Regarding Its Assets