ACCA · Question 23 · Tangible Non-Current Assets
SECTION B - CASE 2: BioHarvest Agri
BioHarvest Agri Co operates commercial vineyards. The year-end is 30 September 20X6.
BioHarvest uses the revaluation model for its vineyard land. On 1 October 20X4, the land was revalued upwards by $500,000. On 30 September 20X6, due to a change in zoning laws, the land suffered a revaluation deficit of $800,000.
How should the $800,000 deficit be recorded in the financial statements for the year ended 30 September 20X6?
Answer options:
Debit Profit or Loss $800,000
Debit Other Comprehensive Income $800,000
Debit Other Comprehensive Income $500,000; Debit Profit or Loss $300,000
Debit Retained Earnings $500,000; Debit Profit or Loss $300,000
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