Page 29 - FR Integrated Workbook 2018-19
P. 29
Tangible non-current assets
Example 1 cont.
Workings
(W1)
Land Buildings Total
$000 $000 $000
Cost 1,000 4,000 5,000
Depreciation (10/50) – (800) (800)
–––––– –––––– ––––––
Carrying amount b/f 1,000 3,200 4,200
Revaluation gain 3,000 2,800 5,800
–––––– –––––– ––––––
Revalued amount 4,000 6,000 10,000
Depreciation charge (1/40) – (150) (150)
–––––– –––––– ––––––
Carrying amount c/f 4,000 5,850 9,850
–––––– –––––– ––––––
(W2)
$000
New depreciation charge As above 150
Old depreciation charge 4,000 × 1/50 (80)
––––
Transfer to retained earnings 70
––––
Alternatively the transfer could be calculated by dividing the revaluation surplus
relating to the building by the remaining life of the asset.
$2.8m × 1/40 = $70,000
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