Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Question 8.5
- This topic has 4 replies, 3 voices, and was last updated 4 years ago by
John Moffat.
- AuthorPosts
- October 30, 2020 at 11:38 pm #593591
I am confused on question 8.5. I hope you can help ! I tried to work it out but not able to see how they have done it. Thanks John !
October 31, 2020 at 5:08 am #593597yea same i didnt get the part where we find out the total expected life before revaluation.
October 31, 2020 at 10:56 am #593628Given that the building was being depreciated at 2% per year, it must have originally had a useful life of 1005/2% = 50 years.
At the date of revaluation the question says that the remaining useful life is 40 years, so it must have been owned so far for 10 years.
Therefore the NBV at the date of the revaluation was 800,000 – (10 x 2% x 800,000) = $640,000.
So the surplus on revaluation is 1,000,000 – 640,000 = $360,000 and the depreciation charge is 1,000,000 / 40 = $25,000
October 31, 2020 at 1:18 pm #593659Thanks John ! honestly very helpful
October 31, 2020 at 3:12 pm #593665You are welcome 🙂
- AuthorPosts
- You must be logged in to reply to this topic.