PROPERTY,PLANT AND EQUIPMENT

On 1 April 20X8 the fair value of Xu's property was $100,000 with a remaining life of 20 years. Xu’s policy is to revalue its property at each year end. At 31 March 20X9 the property was valued at $86,000. The balance on the revaluation surplus at 1 April 20X8 was $20,000 which relates entirely to the property. Xu does not make a transfer to realised profit in respect of excess depreciation. Required: 1 Prepare extracts of Xu's financial statements for the year ended 31 March 20X9 reflecting the above information. ANS your understanding 2 (1) Extracts of the financial statements for Xu at 31 March 20X9 Statement of profit or loss and other comprehensive income (extract) $ Depreciation $100,000/20 years (5,000) Other comprehensive income: Revaluation loss (W2) (9,000) Statement of financial position (extract) Non-current assets Property (at valuation) 86,000 Equity Revaluation surplus (20,000 – 9,000) 11,000 Good day,Please can you explain why the depreciation in this question was calculated using 100,000 and not 86,000 when the property has already been revalued to 86000.Thank you in advance