Under the Revaluation Model, When as Asset Is Written Down

question 13

Multiple Choice

Under the revaluation model, when as asset is written down to fair value, which of the following statements is incorrect?

• A)Property plant and equipment can be valued at market value if market value can be measured reliably.
• B)The loss recorded when a capital asset is written down flows through other comprehensive income, so that net income is not affected.
• C)The company is required to value all similar assets in the same way.
• D)Under IFRS, a write down reduces the carrying amount of the capital asset and the loss is charged to net income.

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Definitions:

Deontological Theory

An ethical framework that judges the morality of an action based on the action's adherence to rules or duties, rather than the consequences of the action.

Utilitarian Theory

A theory in ethics and philosophy that actions are right if they are useful or for the benefit of a majority.

Teleological Theory

Refers to an ethical theory that the morality of an action is determined by its outcome or end result.

Profit Maximization Theory

A theory suggesting that the primary goal of a company is to increase its profits to the highest possible level within a given time period, subject to legal and market constraints.