Revaluation

[@mitcheldanecabilan6821]

thank you, sir!

[@manganime1000]

Bale sir, either fair value or depreciated replacement cost. Same pa din po ng computation?

[@argemporio6815]

Yes. Sound Value is the fair value of the PPE. In the absence of which, you use DRC.

[@manganime1000]

Kapag pina-appraise po, ung amount sa appraisal report un din po ba ung fair value? For example po yung Bldg ang cost ay 20M, Accumulated Depn(90% or fully depreciated)18M and ang carrying amount ay equal na sa residual value na 2M(10% ng cost) then nung nagpa-appraise sila, 40M ung nakaindicate sa appraisal report. Tapos ang ginawa po nila ay ung 40M na appraise amount ang kinompare sa cost. Bale may increase sa bldg ng 20M, ung new acc. depn po ay 36M (40Mx90%) and ung sound value po nila 4M(10%) kaya may revaluation surplus sila ng 2M. Tama po ba un sir? Ayan po kasi ung ginawa ng management.

[@argemporio6815]

@@manganime1000 This is a practical case eh. Kung sasabihin natin na ang fair value ay 40M, dapat yun na ang sound value. Pero in this case I think yung sinasabi ng management is ang 40M is the replacement cost then 36M(90%} is the depreciation on the replacement cost kaya may sound value na 4M at revaluation na 2M.

[@argemporio6815]

@@manganime1000 so the 40M na appraise value na sinasabi ng management is the replacement cost, not the fair value. Sorry sa late na reply 😌

[@manganime1000]

Salamat po. So ung nasa appraisal report po ay not necessary fair value, it could be replacement cost depende na din po sa management?