Revaluation and Straight-Line Depreciation Over Remaining Life

Steps:

• NBV at 1 Jan 2018: $400,000 cost minus 8 years depreciation ($400,000 / 40 = $10,000/year) =$320,000.
• Revalue to $480,000 on 1 Jan 2018; new carrying amount is$480,000.
• Remaining life: 40 - 8 = 32 years; annual depreciation = $480,000 / 32 =$15,000.
• Depreciation for 2018-2019 (2 years): 2 × $15,000 =$30,000.
• NBV at Dec 2019: $480,000 -$30,000 = $450,000.

Why B is correct:

• IAS 16 requires depreciating the revalued amount over remaining useful life, yielding $450,000 after 2 years.

Why the others are wrong:

• A: Uses original depreciation for 10 years ($300,000), ignoring revaluation.
• C: Applies no post-revaluation depreciation to $480,000.
• D: Likely miscalculates remaining life or annual rate (e.g., 40-year total instead of 32).

Final answer: B