IAS 16 PPE

No, and therefore your supplementary question is not applicable

Thank you sir :)

You're welcome

Sir, could you please explain the following question? The company's building was acquired on 1 January 2002 for $2,000,000. It had an expected useful life of 40 years with no residual value. On 31 December 2005, it was revalued at $2,160,000. It was disposed of for $1,720,000 on 31 December 2006. Prepare journal entries I'm having trouble understanding the depreciation part of this question. Would it be 2,000,000 / 40 = 50,000 for 4 years(2002-2005) and then 2,160,000 / 36 = 60,000 for 2006?

That's exactly right ... where do you think that you're having trouble understanding that calculation? And there's a credit into the revaluation reserve on 31 December, 2005 of $360,000 followed on 31 December, 2006 by the removal of that credit to set off against the loss of $380,000 OK? Incidentally, it appears that the directors MAY be guilty of a little bit of manipulation here! If the building had NOT been revalued on 31 December, 2005 and had been sold on 31 December, 2006 for $1,720,000 there would have been a loss on disposal to be accounted for of $30,000 in the year to 31 December, 2006

So the journal entry for this would be Dr Revaluation surplus 360,000 Dr Loss on disposal 20,000 Dr Cash 1,720,000 Dr Accumulated depreciation 60,000 Cr Asset 2,160,000 Is this right?

Yes, that works It would be more "normal" to have 2 or 3 separate less convoluted journals rather than a single composite masterpiece, but, as I said, it works

Thanks a ton sir!! I don't know what I would have done without opentuition! Thank you :)

You're welcome