At December 31, 2020, the end of its first year of operations, Franklin SA chose to use the revaluation framework allowed under IFRS. Franklin’s ledger shows Equipment €750,000 and Accumulated Depreciation—Equipment €150,000.

Instructions

a. Independent appraisers determine that the plant assets have a fair value of €660,000. Record the revaluation.

b. Using your answer from part (a), what would be the amount of Franklin’s 2021 depreciation? Assume no change in the value of Franklin’s equipment in 2021, a 4-year remaining life, and no residual value.

c. Independent appraisers determine that the plant assets have a fair value of €520,000. Record the revaluation. (Ignore your answers to parts (a) and (b).)

d. Using your answer from part (c), what would be the amount of Franklin’s 2021 depreciation?
Assume no change in the value of Franklin’s equipment in 2021, a 4-year remaining life, and no residual value.