Question

NGD recently acquired a new piece of land in Suffolk County on April 1, 2012. The land cost $5,000,000. NGD reports under IFRS and revalues its land. On December 31, 2017, the fair value of the land is $4,500,000. On December 31, 2020, the fair value of the land is $5,300,000.

Provide all necessary journal entries for 2012 through 2020.

Answer 1

	Cost value of land	$        5,000,000
Less:	Fair value of the land on December 31, 2017	$        4,500,000
	Impairment loss on land	$            500,000
	Fair value of the land on December 31, 2020	$        5,300,000
Less:	Fair value of the land on December 31, 2017	$        4,500,000
	Total Increase in land	$            800,000
Less:	Reversal of impairment loss on land	$            500,000
	Revaluation Reserve	$            300,000

Date	General Journal	Debit	Credit
April 1, 2012	Land	$    5,000,000
	Cash		$     5,000,000
	(To record cash paid to acquire the land.)
December 31, 2017	Impairment Losses	$       500,000
	Land		$         500,000
	(To record the impairment of land.)
December 31, 2020	Land	$       800,000
	Reversal of impairment losses		$         500,000
	Revaluation Reserve		$         300,000
	(To record reversal of impairment losses and an increase in fair value)