Business Practice & Alternative Accounting Policy: Property, Plant & Equipment Building: Retail property - Display & Workshop Background: The business commenced on 1 July 2017 and it was decided by the three shareholders to accept a 12-month rental agreement in their first year of business. Due to successful trading, the three shareholders decided to purchase an old building on 1 April 2018 and after renovations to trade from 143 Saxon Street North Melbourne property on 1 July 2018. On Your Bike's bank, Victoria Enterprise Bank Lid recommended that the entity revalued the property on 30 June 2020. Post-script: The global pandemic COVID- 19 has greater impacted the City of Melbourne. The State Government decided to introduce Stage 4 Restrictions which has eroded the Retail Sector and the valuation of Commercial Properties. https://theurbandeveloper.com/articles/deteriorating-conditions-and-valuations-hit- property-markets Property Details: 143 Saxon Street, North Melbourne Key Dates: Retail, Warehouse & Repair Shop Date of Purchase: 1 April 2018 Date of Operation after renovation 1 July 2018 Cost of purchase: Building 900,000 Stamp Duty - Victorian Government 25,000 Legal Fees - Ryan & Ling Solicitors 15,090 Interior fit-out - Bespoke Builders Notes relating to the property at 143 Saxon Street North Melbourne. The property is located 2.5 kms from Melbourne's Central Business District, . The depreciation rate for the property is 5% per annum at cost as stated by the Australian Taxation Office (ATO). There has been no previous revaluation of 143 Saxon Street North Melbourne. Blackburn & Smyth, sworn valuers conducted a revaluation of the property, 143 Saxon Street North Melbourne and deemed that the fair value was $1,150,000 as at 30 June 2020. On Your Bike Pty Ltd has been recommended to adopt the Revaluation Approach (Net Method) for any revaluation calculation, recording and reporting in the financial statements as at 30 June 2020. The balance day is always 30 June. Required: 1. Determine the historical cost of the property at 143 Saxon Street North Melbourne as at 1 July 2018. Any commentary needs to be supported by AASB 116 Property, Plant & Equipment. 2. Complete the three (3) revaluations of 143 Saxon Street North Melbourne as at 30 June 2020 adopting the Revaluation Approach (Net Method). The Fair Value DOES NOT CHANGE for each revaluation. The Fair Value as at 30 June 2020 is $1,150,000. First Revaluation - Depreciation rate 5% Second Revaluation - Depreciation rate 7% Third Revaluation -Depreciation rate 3% For each revaluation, the following tasks must be completed 1. Calculation of depreciation on a per annum basis 2. Depreciation schedule identifying the period, depreciation amount, accumulated depreciation and carrying amount. 3. Determination of a Revaluation surplus or Loss on Revaluation. 4. General Journal entries to record the revaluation as at 30 June 2020 5. Report the revaluation - Income Statement and Balance Sheet