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Hi Sir,
I am getting stuck on the below.
Nimoy purchased an item of heavy industrial machinery for 90k on 1Oct X5. It had an estimate useful life of 10 years and a residual value of 5K. Plant and machinery is depreciated on a straight-line basis.
On 30 Sep X8 Nimoy revalued the industrial machine to 75K in accordance with a change in policy for the measurement of tangible fixed assets. Nimoy decided to undertake the annual revaluation reserve transfer.
The tax authorities do not allow depreciation as a deductible expense. Instead, tax relief is granted based on an allowable deduction of 30% of the cast of the asset in the year in which the asset is acquired followed thereafter by an annual allowable deduction of 15% calculated on a reducing balance basis. Revaluations do not affect the tax base of the asset.The applicable rate of income tax throughout is 20%
What is the value of the industrial machine and the associated revaluation surplus in the SOFP? (ignore any deferred tax)
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