Our understanding of IFRS for SMEs and IFRS is that all property plant and equipment carried at cost, with the exception of land, should be depreciated to its residual value. Relevant extracts from IFRS:
IAS 16 par 58 says ” Buildings have a limited useful life and are therefore depreciable assets. An increase in the value of the land on which the building stands does not affect the determination of the depreciable amount of the building.”
IAS 16 par 52 “Depreciation is recognised even if the fair value of the asset exceeds its carrying amount, as long as the asset’s residual value does not exceed its carrying amount. Repair and maintenance of an asset do not negate the need to depreciate it.”
IAS 16 par 54 “The residual value of an asset may increase to an amount equal to or greater than the carrying amount. If it does, the depreciation charge is zero unless and until the residual value subsequently decreases to an amount below the assets carrying amount.”