assets lost and destroyed 1

i did not understand the solution of these questions in book. the way they calculated base cost is confusing.

1. B purchased an asset for 25000 on 1 oct 1991 which was destroyed by fire on 30 sept 2014. he received compensation of 35000 from his insurance company on 1 jan 2015. he purchased replacement asset for 40000 on 1 feb 2015. calculate the base cost .
cost of replacement cost = 40000
less:compensation 35000
less:deemed disposal proceeds of old asset :(25000)= (10000)

replacement asset base cost 30000