Fragrance plc has owned a factory building for many years. The building is recorded in the statement of financial position (balance sheet) at £250,000, being historical cost of £300,000 less accumulated depreciation of £50,000. The recent report of a professional valuer indicated that the property is valued at £380,000 on an open market basis for its existing use. Explain the effect this information will have on the reported financial statements.

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