Denver purchased a building on 1 April 2018 for 12,000,000. At that date it was determined to have a useful life of 25 years and a nil residual value. The building is occupied by the staff of Denver. The company adopts the revaluation model when valuing its buildings and charges a full years depreciation in the year of purchase.

On 31 March 2020, the building was professionally assessed to have a fair value of 13,000,000. There was no change to the original estimated life or residual value of the building. On 31 March 2021, because of an industrial accident, the buildings fair value less costs of disposal were determined to total 10,000,000 and its value in use amounted to 10,200,000

1. State, with reference to the appropriate accounting standard, how an entity should determine the recoverable amount of a non-current asset.

2. Prepare the necessary journal entries to account for the building in the financial statements of Denver for the year ended 31 March 2021.