You need to find the carrying amount of the building in financial statements at 31 oct 20X6. Building was purchased on 1 nov 20X1 at cost 1500,000 accumulated depreciation at 1 nov 20X5 300,000. At the same date it is professionaly valued 1800,000. Building are depreciated at 5% of cost.
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Non current asset
19d ago#1The accumulated depreciation at 31 October 20X6 will be 300,000 + (5% x 1,500,000) = 375,000.
So the carrying value will be 1,500,000 - 375,000 = 1,125,000.
Have you watched our free lectures on non-current assets because I am puzzled as to why you are having a problem with this.
Why? Don't you use the revaluation Amount
Actually , it's answer in bpp exam kit is 1687500=
1800k-(1800k×6.25%)
Actually let me tell whole solution written in it .It says that there was 20 years( 5%) and at the time of revaluation , four years has elapsed since purchase leaving a remaining useful life of16 years(6.25% per year)
18d ago#4Revaluations are not compulsory and if you have copied the whole question it does not say to revalue.
Without the revaluation the depreciation remains at 5% of the original cost.
If they do revalue then they depreciate over its remaining useful life which is indeed 16 years.
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