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Entity E acquires an asset at January 1, 20X1 for CU100,000. At that date, the asset is estimated to have a useful life of 20 years. The asset will be depreciated using the straight-line method. At the beginning of 20X3, the remaining useful life of that asset is re-estimated at 10 years. At the end of 20X5, the asset is revalued (Entity E previously having determined that the fair value of the asset did not differ materially from its carrying amount); its FV at that date is estimated to be CU84,000 and its gross carrying amount is estimated to be CU150,000 (determined by reference to the FV of similar assets at the beginning of their useful lives). Its estimated remaining useful life is unchanged. Both at acquisition and subsequently, the asset is estimated to have a nil residual value.

1) For both US GAAP and IFRS, indicate the following amounts at the end of 20X5 (before the revaluation and after the change in useful life):

US GAAP (Dr./Cr.) IFRS Dr./Cr.)

Gross carrying amount Accumulated depreciation Carrying amount

2) If Entity E selects the alternative under IAS 16:35(a) (disproportionate restatement) to restate the gross carrying amount by reference to the observable market data, please provide the journal entry to recognize this revaluation at the end of 20X5 after the change in useful life :

Journal entry accounts Dr. CU000 Cr. CU000

3) Prepare the journal entry assuming Entity E chose to restate the gross carrying amount of the asset proportionally to the change in carrying amount after the change in useful life (IAS 16:35(a)):

Journal entry accounts Dr. CU000 Cr. CU000

4) Prepare the journal entry assuming Entity E selected the alternative under IAS 16:35(b) (elimination approach) after the change in useful life:

Journal entry accounts Dr. CU000 Cr. CU000

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