On 1 April 2018, Accra Ltd acquired office accommodation at a cost of GH¢45 million with a 30- year estimated useful life. During the year, the property market in the area slumped and the fair value of accommodation fell to GH¢37.5 million at 31 March 2019 and this was reflected in the financial statements. However, the market unexpectedly recovered quickly due to the announcement of major government investment in the area’s transport infrastructure. On 31 March 2020, the valuer advised Accra Ltd that the offices should now be valued at GH¢52.5 million. Accra Ltd has charged depreciation for the year but has not taken account of the upward valuation of the offices. Accra Ltd uses the revaluation model and records any valuation change when advised to do so. Required: Show how the above issues will be accounted for in the year ending 31 March, 2020 in the income statement and the statement of financial position.
On 1 April 2018, Accra Ltd acquired office accommodation at a cost of GH¢45 million with a 30- year estimated useful life. During the year, the property market in the area slumped and the fair value of accommodation fell to GH¢37.5 million at 31 March 2019 and this was reflected in the financial statements. However, the market unexpectedly recovered quickly due to the announcement of major government investment in the area’s transport infrastructure. On 31 March 2020, the valuer advised Accra Ltd that the offices should now be valued at GH¢52.5 million. Accra Ltd has charged
Required:
Show how the above issues will be accounted for in the year ending 31 March, 2020 in the income statement and the
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