[teemo0sg]

The building’s “Cost $10m – Depreciation $0.5m” is $9.5 million, and revalued amount is $8 million on 31 May 2006. Therefore, on 31 May 2006, there were $1.5 million impairment loss recognised.
On 31 May 2007, “Valuation $8 – Depreciation $0.42m” is $ 7.58, and revalued amount is $11 million on 31 May 2007. (Differences= $3.42m)

Text books said that ‘If company uses Revaluation model, the increased revalued amount shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss’
Therefore, I think that reversing the impairment loss (reverse the revaluation decrease in Revaluation model) $1.5m should be recognised in profit or loss, then $1.92m should be recognised as Revaluation reserve.

Thanks for Quick Replying 🙂

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