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James Inti acquired a block of land on 1 July 2013 at a cost $1.4...

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Accounting

James Inti acquired a block of land on 1 July 2013 at a cost $1.4 million and valued it according to the cost model. Three years on, the management found out that the area where the land was acquired has been contaminated due to a chemical incident.

On 30 June 2015, the management is provided with the following information:

The value in use $1.3 million

Net selling price $1.2 million

REQUIRED

Describe the accounting treatment required under Accounting Standard to record the drop in the value of the land?

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