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On January 1, 2001, the Best Use Company, an IFRS compliant company, purchased a building for use as a recreation area.

On January 1, 2001, the Best Use Company, an IFRS compliant company, purchased a building for use as a recreation area. The original purchase price of the building is $600,000 and has a useful life of 30 years and will be depreciated using straight line depreciation. The company uses the alternate treatment of asset valuation under IAS 16. At December 31, 2005, the company engaged an appraiser who determined the fair market value of $750,000. At December 31, 2010 the appraiser determined that the fair market value of $250,000. What journal entry, if any, would be made to revaluate the asset and what effect would they have on the balance sheet and income statement? If applicable, please show journal entries for both the net and gross methods of revaluation for !2/31/05 and 12/31/10.

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