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Exercise 1: On 02/02/2017 Gecko AG bought a production facility for 3.570.000 (including 19% VAT). A reduction of the invoice price by 2% was agreed with the seller if the purchase price is within a 14-day payment term is paid. Gecko AG transfers the Invoice amount on 02/10/2017. The following information is also available to disposal: - The plant will receive a government investment grant of 220.796 funded, which does not have to be repaid. - A freight forwarder delivers the system for 23.800 (including 19% VAT). To insure the freight, Gecko AG takes out insurance in the amount of 1% of the net value of the goods. - The system is set up by in-house employees. Here there are wage and material costs of 130.796 and not directly attributable manufacturing and administrative overheads in the amount of 30.000. - A major inspection of the machine must be carried out every 4 years. The costs incurred are estimated at 400.000 each. These 400.000 are already included in the price of the facility. However, they must be considered with their own useful life when depreciating. - The production facility has a useful life of 25 years. - An appraiser determines the following market values of the production facility. The market values in 2019 and 2020 correspond to the recoverable amount in accordance with IAS 36 . a) Give the general scheme for determining the acquisition costs of Property, plant and equipment in accordance with IAS 16. Calculate the acquisition costs of the production plant. Assume that Gecko AG makes use of the option to deduct the state subsidy from the purchase price in accordance with IAS 20 . b) Explain how to proceed with the general overhaul. c) Book the purchase and the subsequent evaluation for the years 2017 to 2020 under the assumption that Gecko AG would like a subsequent valuation at amortized cost, the system depreciates on a straight-line basis and the full depreciation amount applies in the first half of the year. Deferred taxes are to neglect. d) Book the purchase and the subsequent evaluation for the years 2017 to 2020 under the assumption that Gecko AG uses the revaluation model for the subsequent valuation, depreciates the system on a straight-line basis and applies the full 1 depreciation amount in the first half of the year. Any revaluation reserve that may arise should not be collected on a pro-rata basis. Deferred taxes are negligible. e) What advantages and disadvantages can result from the application of the revaluation model on the part of the preparers, investors and auditors

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