Clos Varenne applies the revaluation model to a vineyard (land and vines, the vines being bearer plants within IAS 16); the grapes, agricultural produce, are excluded from this asset. After a hailstorm, the vineyard was revalued to its fair value at the reporting date: its revalued carrying amount is 215,000. Its disposal would involve costs of disposal of 13,000; as its value in use is 195,000, its recoverable amount is its fair value less costs of disposal, i.e. 202,000. The revaluation surplus recognised on this vineyard amounts to 42,000. Record the impairment loss.
- Revalued amount of the vineyard (fair value at the reporting date)
- 215,000
- Costs of disposal
- 13,000
- Value in use of the vineyard
- 195,000
- Recoverable amount of the vineyard
- 202,000
- Revaluation surplus of the vineyard
- 42,000