Question 6

Amazing Adventure purchased a building on 1 January 2020 at the value of RM1 million. The building estimated useful life is 20 years, while the residual value is estimated to be RM200000. The depreciation policy is based on straight line method. The market value of the building was estimated at RM1.3 million on 1 January 2021 and RM1.6 million on 1 January 2022.

Required: a) Assume Amazing Adventure opts to value the building based on cost model. Determine the carrying amount of the building as at 1 January 2021 and 1 January 2022.

b) Assume that now the company uses revaluation model. Determine the carrying amount of the building as at 1 January 2021, 1 January 2022 and 1 January 2023.

Question 7

ABC acquired a plant for $ 200,000 on 1 January 2017 and estimated the useful life to be 10 years. The entity chose the revaluation model and on 1 January 2020 the fair value was determined to be $150,000.

Calculate the adjusted depreciation at 31 December 2020.