MTN Ghana Ltd. acquired a brand new property (land and buildings) on 1st January, 2016 for...

 

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MTN Ghana Ltd. acquired a brand new property (land and buildings) on 1st January, 2016 for GH¢40 million (including GH¢15 million in respect of the land). The asset was revalued on the 31st of December, 2017 to GH¢43 million (including GH¢ 16.6 million in respect of the land). The buildings element was depreciated over a 50-year useful life to a zero residual value. The useful life and residual value did not subsequently need revision. On the 31st of December, 2018 the property was revalued downwards to GH¢35 million as a result of the recession (including GH¢14 million in respect of the land). The company makes a transfer from revaluation surplus to retained earnings in respect of realised profit. Required: i. Determine the amounts that should be recognised in profit or loss and other comprehensive income for the years ended 31 December 2017 and 31 December 2018. 4 marks MTN Ghana Ltd. acquired a brand new property (land and buildings) on 1st January, 2016 for GH¢40 million (including GH¢15 million in respect of the land). The asset was revalued on the 31st of December, 2017 to GH¢43 million (including GH¢ 16.6 million in respect of the land). The buildings element was depreciated over a 50-year useful life to a zero residual value. The useful life and residual value did not subsequently need revision. On the 31st of December, 2018 the property was revalued downwards to GH¢35 million as a result of the recession (including GH¢14 million in respect of the land). The company makes a transfer from revaluation surplus to retained earnings in respect of realised profit. Required: i. Determine the amounts that should be recognised in profit or loss and other comprehensive income for the years ended 31 December 2017 and 31 December 2018. 4 marks