ABC adheres to IFRS and applies the revaluation model to account for its Patents. Prior to 2009, there was no balance in the company's Revaluation Surplus (OCI) accounts relating to its long-lived assets. The following year-end data refers to the company's patents(the table values are in 000's):
$\begin{array} { | l | l | l | }
\hline & \text { Carrying Value } & \text { Fair Value } \
\hline 2009 & \$ 100 & \$ 120 \
\hline 2010 & \$ 90 & \$ 60 \
\hline 2011 & \$ 80 & \$ 100 \
\hline
\end{array}$
-The 2009 revaluation journal entry would include

Question

ABC adheres to IFRS and applies the revaluation model to account for its Patents. Prior to 2009, there was no balance in the company's Revaluation Surplus (OCI) accounts relating to its long-lived assets. The following year-end data refers to the company's patents(the table values are in 000's):
$\begin{array} { | l | l | l | } 
\hline & \text { Carrying Value } & \text { Fair Value } \
\hline 2009 & \$ 100 & \$ 120 \
\hline 2010 & \$ 90 & \$ 60 \
\hline 2011 & \$ 80 & \$ 100 \
\hline
\end{array}$
-The 2009 revaluation journal entry would include

Quizplus · Accepted Answer

The revaluation model under IFRS requires that increases in fair value be credited to the revaluation surplus account in equity, unless it reverses a previous decrease recognized in profit or loss. Since there was no prior revaluation surplus, the $20,000 increase in 2009 is credited to the revaluation surplus account.

ABC Adheres to IFRS and Applies the Revaluation Model to Account