Which of the Following Statement Is True of Revaluation Model

question 24

Multiple Choice

Which of the following statement is true of revaluation model in AASB 116?

• A) It is the preferred model of managers with bonus based payments.
• B) It is required under AASB 116.
• C) Once adopted the firm can no longer revert back to cost model.
• D) Accumulated depreciation is required to be eliminated against the gross carrying amount of the asset.
• E) None of the given answers.

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Definitions:

Deferred Payment Incentive

A compensation structure where part of an individual's or entity's payment is postponed to a future date, often used as an incentive or reward.

Short-term Profit

Profits earned over a short period of time, typically a quarter or a year, reflecting the immediate financial health of a company.

Long-term Profits

Profits generated over an extended period, indicating the sustainability and viability of a company's business model.

SVA

Stands for Shareholder Value Added, which is a measure used to evaluate a company's ability to generate wealth for its shareholders beyond the required rate of return on their investment.