IBBI Land & Building

Practice session

A businessman purchased a plot of 1000 m² in a posh locality of a city in the year 1987 for a price of INR 30,00,000. In the year 1988, he constructed a residential bungalow having 300 m² built up floor area at ground level and 100 m² built up area at first floor level at the cost of INR 14,00,000. Prevalent replacement cost of similar bungalow as on today is INR 30,000 per m² Prevalent land price in the locality at present is INR 60,000 per m² Age of building is 30 years and the total life of the building is 60 years. (6x2 = 12 marks) What will be the depreciation amount of the bungalow by adopting straight line method of depreciation and considering scrap value at 10 %?

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