At 30 June 2013 the fair value of Wine Co's vineyard is $2.5 million. At 30 June 2014 the following information is available:

There have been no changes in fair values between 1 April and 30 June 2014.
At 30 June 2014 the vines will be recorded in Wine Co's financial statements at an amount of:

Question

At 30 June 2013 the fair value of Wine Co's vineyard is $2.5 million. At 30 June 2014 the following information is available:

There have been no changes in fair values between 1 April and 30 June 2014.
At 30 June 2014 the vines will be recorded in Wine Co's financial statements at an amount of:

Quizplus · Accepted Answer

The fair value of the vineyard increased from $2.5 million to $2.7 million, resulting in a revaluation gain of $200,000. However, since the carrying amount of the vineyard cannot exceed its recoverable amount (which is the higher of its fair value less costs to sell and its value in use), the carrying amount will be adjusted to the fair value of $2.7 million, but capped at its original cost of $2.5 million. Therefore, the carrying amount of the vineyard will be $2.58 million, which is the lower of $2.7 million and $2.5 million.

At 30 June 2013 the Fair Value of Wine Co's