Under AASB 116,the Net Method of Treating Accumulated Depreciation When

question 24

Multiple Choice

Under AASB 116,the net method of treating accumulated depreciation when assets are re-valued requires:

• A) accumulated depreciation to be increased by the same proportion as the gross carrying amount of the asset, so the carrying amount of the asset represents its re-valued amount
• B) accumulated depreciation to be closed to the asset account before re-valuation
• C) accumulated depreciation to be written back to net profit on the date of re-valuation
• D) accumulated depreciation to be ignored at re-valuation

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Definitions:

Competitive Market

A market structure in which many firms offer products or services that are similar, leading to high levels of competition.

Remarkable Healing

Significant or extraordinary recovery from illness or injury.

Cournot Duopolists

Firms in a duopoly market structure where each firm chooses its output level assuming the other does not change its output, leading to a strategic interdependence in decision-making.

Welfare Loss

The decrease in social welfare, typically caused by market inefficiencies or failures, often measured as lost income or utility.