[sampearson]

Ok that table hasn’t come out at all clear.

I’m at the stage where there’s £50m in reserve after the revaluation gain.

I then calculate the years depreciation on the building, from 30.06.2017 – 1.07.2018, which is £10m. Then I do the depreciation for the original value of the building (£8m), leaving the reserve at £48m.

This means all of the reserve can absorb the decrease in asset value, leaving excess of £18m..

[sampearson]

Hi there,

Thank you for the reply.

I have used the format as shown in the lecture. I get to the carrying value on 30.06.2017 and after that it doesn’t seem right. There’s left over reserve of £18k, is that correct? I haven’t completed the whole question but this is what I have so far:

Narrative Land Building Total Revaluation Reserve

Cost (01.07.2017) 80000 200000 280000

Acc. Depn
(200000/25yrs) x 5 yrs (40000) (40000)

CV (30.06.2017) 80000 160000 240000 290000 50000

Depn
(200000/20 yrs) x 1 yrs (8000) (8000) (10000) (2000)

CV (before) 280000 48000

(30000) (30000)

CV (after) 250000

Thanks

[Author]

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