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Discuss the accounting treatment for the transactions

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Question - SC is reviewing the accounting treatment of its buildings. The company uses the 'revaluation model' for its buildings. The buildings had originally cost $10 million on 1 June 2014 and had a useful economic life of 20 years. They are being depreciated on a straight-line basis to a nil residual value. The buildings were re-valued downwards on 31 May 2015 to $8 million which was the buildings' recoverable amount. At 31 May 2016, the value of the buildings had risen to $11 million which is to be included in the financial statements. The company is unsure how to treat the above events. Discuss the accounting treatment for the above transactions.

Reference no: EM133175385

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