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Mattamax Ltd owns two buildings acquired in 2016 for the purpose of future development. Building A cost $290,000 and Building B cost $330,000. Valuations of the blocks are undertaken by an independent valuer on 30th June 2018 and 2020. The assessed values are as follows: 2018 valuation $ 2020 valuation $ Building A 270,000 310,000 Building B 350,000 320,000
Question (a) Provide the journal entries for the revaluations that were undertaken in 2018 and 2019 for the buildings.
Question (b) What might the economic consequence of asset revaluations be for the business?
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