A company which uses the revaluation model for its PPE bought a building on 1 January 2014 for £100m. The building has an estimated useful life of 50 years and nil residual value. On 31 December 2018, the building was revalued at £81m and on 31 December 2020 it was revalued for a second time at £78m. The company uses the straight-line method of depreciation for all PPE items. There was no change to the remaining useful life after each revaluation. What is the net effect of both revaluations on the statement of comprehensive income? Select one: a. A revaluation loss in the income statement of £10m b. A revaluation loss in the income statement of £14m Oc. A revaluation loss in the income statement of £22m d. A revaluation loss in the income statement of £12m e. A revaluation loss in the income statement of £4.2m f. A revaluation loss in the income statement of £8.4m

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company which uses the revaluation model for its PPE bought a building on 1 January 2014 for £100m.
The building has an estimated useful life of 50 years and nil residual value. On 31 December 2018, the
building was revalued at £81m and on 31 December 2020 it was revalued for a second time at £78m. The
company uses the straight-line method of depreciation for all PPE items. There was no change to the
remaining useful life after each revaluation.
What is the net effect of both revaluations on the statement of comprehensive income?
Select one:
a. A revaluation loss in the income statement of £10m
b. A revaluation loss in the income statement of £14m
Oc. A revaluation loss in the income statement of £22m
d. A revaluation loss in the income statement of £12m
e. A revaluation loss in the income statement of £4.2m
f. A revaluation loss in the income statement of £8.4m
Transcribed Image Text:A company which uses the revaluation model for its PPE bought a building on 1 January 2014 for £100m. The building has an estimated useful life of 50 years and nil residual value. On 31 December 2018, the building was revalued at £81m and on 31 December 2020 it was revalued for a second time at £78m. The company uses the straight-line method of depreciation for all PPE items. There was no change to the remaining useful life after each revaluation. What is the net effect of both revaluations on the statement of comprehensive income? Select one: a. A revaluation loss in the income statement of £10m b. A revaluation loss in the income statement of £14m Oc. A revaluation loss in the income statement of £22m d. A revaluation loss in the income statement of £12m e. A revaluation loss in the income statement of £4.2m f. A revaluation loss in the income statement of £8.4m
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