An intangible asset is acquired on January 1, 2018, for P500,000 while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only 5 years. At January 1, 2019, management is uncertain that the process can actually be made economically feasible and decides to write-down the intangible asset to an estimated market value of P150,000 with no change in its remaining useful life. On January 1, 2020, having perfected the related production process, the asset is now appraised at a sound value of P600,000. Under the revaluation model, what amount should be reported in the shareholder's equity as a result of revaluation? а. Р-0- b. P187,500 с. Р250,000 d. P300,000

An intangible asset is acquired on January 1, 2018, for P500,000 while it has a legal life of 15 years, due to rapidly changing technology, management estimates a useful life of only 5 years. At January 1, 2019, management is uncertain that the process can actually be made economically feasible and decides to write-down the intangible asset to an estimated market value of P150,000 with no change in its remaining useful life. On January 1, 2020, having perfected the related production process, the asset is now appraised at a sound value of P600,000. Under the revaluation model, what amount should be reported in the shareholder's equity as a result of revaluation? а. Р-0- b. P187,500 с. Р250,000 d. P300,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6RE

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