Presto's Brazilian Subsidiary, Brazil Co, owns a corporate office in a desirable location in downtown Brasilia. The
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Question:
Presto's Brazilian Subsidiary, Brazil Co, owns a corporate office in a desirable location in downtown Brasilia. The property was purchased on 1/1/20X1 for the equivalent of $10 million USD and is being depreciated straight-line over a 30-year life. An appraisal on 12/31/X4 indicated that the building is now worth $14 million.
Required:
- Brazil Co is asking whether it can re-measure the property to show this increased value on its statement of financial position and, if so, what the offsetting (credit) entry should be.
- Brazil Co is also asking whether this re-measurement would have any effect on its existing policy to depreciate the building straight-line over 30 years.
- Finally, Presto is wondering whether this increased value is appropriate to carry into its U.S. consolidated financial statements.
Related Book For
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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