ABC Corporation purchased a building worth €200,000 on January 1, 20X8. 

The building has a useful life of 20 years and the company uses straight line depreciation. Assume on December 31, 20x10 the company intends to switch to fair value model and carries out a revaluation exercise which estimates the fair value of the building to be €190,000 at December 31, 20x10. 

Suppose on December 31, 2012 ABC Corp. revalues the building again to find out that the fair value should be in case a) €160,000 and in case b) €140,000

1.Record journal entries for the years ended 31 December 20x8, 20x9, 20x10, 20x11 and 20x12 in both cases (a) and (b)

2.Indicate the Financial Statement effect for the years ended 31 December 20x8, 20x9, 20x10, 20x11 and 20x12 in both cases (a) and (b)

Answer rating: 100% (QA)

Notes DR Debit CR Credit OCI Other Comprehensive Income Acc Accumulated FV Fair value NBV Net book value PL Profit and loss statement 1 Record journal entries for the years ended 31 December 20x8 20x9 ... View the full answer