Question

Ten years ago a corporation purchased a building for $160,000. At that time, the corporation felt that the business was worth $185,000. The current market value of the business is $460,000. The building has been assessed at $435,000 for property tax purposes. At which amount should the corporation record the building in its accounting records___________.

Answer 1

Answer:

$435,000

Step-by-step explanation:

According to the International Financial Reporting Standards (IFRS), the fixed assets are recorded at the fair market value i.e property tax purpose value that is given $435,000 for assessing the building valuation.

The historical cost, business worth, is to be ignored.

So, only $435,000 would be recognized so that the financial statements could be better displayed.

We assume that the IFRS is followed