PPE depreciation after revaluation

Home Forums Ask ACCA Tutor Forums Ask the Tutor ACCA F7 Exams PPE depreciation after revaluation

This topic contains 1 reply, has 2 voices, and was last updated by Avatar of MikeLittle MikeLittle 20 hours, 52 minutes ago. This post has been viewed 93 times

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts

  • avatar
    merryjxm
    Participant
    • Topics: 2
    • Replies: 0

    As stated in the IAS16, the difference of previou depreciation and new depreciation after revaluation needs to be transferred from revaluation surplus to retained earning. But this kind of amount will not be realised in cash or cash equivalents, how to distribute the amount as profit to their shareholders?


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 0
    • Replies: 6692

    You don’t distribute profits to shareholders! Can you imagine being a shareholder and receiving notice from the invested company that you are to receive $X profits

    Cash is distributed and the amount paid / appropriated is shown as a reduction in Retained Earnings within the Statement of Changes in Equity

    In addition, unless something has changed and I missed it, the annual transfer from Revaluation Reserve to Retained Earnings is “suggested” rather than “required”

    Hope that helps

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.