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What are relevance and reliability accounting consideration

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Question - An enterprise purchases a rental property for $10,000,000 as an investment. The building is fully rented, and is in a prosperous area. At the end of the current year, the enterprise hires an appraiser who reports that the fair value of the building is "$15,000,000 plus or minus ten per cent". Depreciating the building over 50 years would reduce the carrying amount to $9,800,000.

Required -

1. What are the relevance and reliability accounting considerations in deciding how to measure the building in the enterprise's financial statements?

2. Does the IASB Framework lead clearly to measuring it at $15,000,000? $9,800,000? Or at some other amount?

Reference no: EM132618401

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