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A company revalued its land and buildings at the start of the year to $10 million ($4 million for the land). The property cost $5 million ($1 million for the land) ten years prior to the revaluation. The total expected useful life of 50 years is unchanged. Show the effects of the above on the financial statements for the year.
Since it says’ the total expected useful life of 50y is unchanged’, why the depreciation = $6 / 40y?? I thought =$6/50y
The “total expected useful life …”
Let’s say the property was bought on 1 January, 2000 and revalued on 31 December, 2009 (so 10 years after acquisition)
When it was bought, it had a total estimated useful life of 50 years until 31 December, 2049 AND THAT HAS NOT CHANGED
So now we revalue on 31 December, 2009 – how much remaining estimated useful life is there up until 31 December, 2049?
OK?
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