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please sir/madam
can you explain me these part in the syllabus?
or refer me to any website
Calculate depreciation on a revalued non- current asset including the transfer of excess depreciation between the revaluation reserve and retained earnings.[S]Calculate the adjustments to depreciation necessary if changes are made in the estimated useful life and/or residual value of a non- current asset.[S]
regards
If you revalue an asset, then from then on you calculate the depreciation on the revalued amount. This is the depreciation expense that appears in the Statement of profit or loss.
Companies are allowed to make a transfer from the revaluation reserve to the retained earnings of the difference between the new depreciation (on the revalued amount) and the old depreciation (on the original cost). This is called the excess depreciation.
They do not have to do this, but they can if they want.
The reason they might want to is that the retained earnings can be paid out as dividend, but the revaluation reserve cannot be paid out as dividend.
thank you sir
but can you refer me any website where i can get some questions on these parts?
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