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Hello,
1. please how do i treat a revaluation if the question states that the property were reassessed at different prices(higher FV-costs) from the time the property was held for sale till it was actually sold.
For example:At the time of classification as held for sale,
the fair value less costs to sell was $2·4 million. On 1st July, 1996 , the property market had
improved and the fair value less costs to sell was reassessed at $2·52 million and at the year-end
on the 31st December, 1996, it had improved even further, so that the fair value less costs to sell was
$2·95 million. The property was sold on 5th January, 1996 for $3 million.2. from the time where property was held for sale, do i calculate depreciation taking into account the revalued amounts? ( from the time o held for sale to actual sale is 1 year)
What will be the step by step accounting treatment please?Hi,
Once the asset has been classified as held for sale then it is left at the amount and no increases in value are accounted for. You can therefore ignore the figures given until the asset is sold. Once it is sold then you will recognise a profit on disposal.
Also, once it is classified as held for sale then no depreciation is charged.
Thanks
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