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Question - Toloko ltd purchased a building on 1st July 2015 at a cost of £2,500,000. The building was used as offices by Toloko ltd. The year end for the company is 31st December. The company policy is to depreciate buildings at 2% per annum on a straight line basis with nil residual value.the company adopted the fair value method for the subsequent measurement of buildings. The building was revalued on 31st December 2017 at £2,600,000 and on 31st December 2019 at £2,450,000.
A) Show how the revaluation on 31st December 2017 and 31st December 2019 will be accounted in toloko ltd for with justifications.
B) If the building was used for renting purposes and not as offices for toloko ltd, show how the revaluation on 31st December 2017 and 31st December 2019 will be accounted for with justifications.
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