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The owner decided to adopt the revaluation model for land and buildings this year. An independent surveyor valued Orchid and Lily’s land and buildings on 1 January 2023 at £14.0 million (land £2.0 million). The owner doesn’t think it makes sense to depreciate following the revaluation, since it reflects the market value. The remaining useful life of buildings at 1 January 2023 was estimated as 20 years. Depreciation of land and buildings are treated as an administrative expense.
Land and buildings carrying amount at 31 December 2022 is £8,451,000
(land £1,200,000)
Use IAS 16
Prepare adjustments detailing the debits and credits
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