Question

Max Ltd. purchased a building on 1 July 2018 for $200,000. The useful life of the...

Max Ltd. purchased a building on 1 July 2018 for $200,000. The useful life of the building was 20 years. After recognition as an asset, the company can choose either the cost model or the revaluation model as its accounting policy for measuring property, plant and equipment. On 30 June 2020, the fair value of the building was assessed as $240,000 by an independent valuer.

Required:

Prepare an extract of the Statement of Financial Position of Max Ltd. as at 30 June 2020 assuming that Max Ltd. adopts the revaluation model to measure its property, plant and equipment (ignore taxation). Show your workings.

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