Under the Accounting Standard Dealing with Revaluations, IAS 16/AASB 116

question 34

Multiple Choice

Under the accounting standard dealing with revaluations, IAS 16/AASB 116, an entity is required to:

• A) adopt either a cost model or a revaluation model.
• B) adopt a revaluation model.
• C) adopt a cost model.
• D) revalue its assets

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Definitions:

Price

The amount of money required to purchase a good or service, determined by various factors including supply and demand.

Perfectly Competitive Industry

A market structure where many firms sell identical products, entry and exit are unobstructed, and all buyers and sellers have perfect information.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing the excess returns over the firm's opportunity costs.