I think that´s because the revaluation reserve was 4,400; the excess depreciation was 550; thus the balance was 4,400-550=3,850 that needs to be used up / removed because of the revaluation decrease / impairment. Thus, we debit by 3,850 the revaluation reserve but the value of the impairment was 4250. Then 4250-3850=400 impairment that goes to PL.
Hi Chris, Would you kindly clarify why you’re saying that all of $3,850 in the revaluation reserve is going to be used? And where are the entries for accumulated depreciation & depreciation?
MOHDSHAZEEB says
Hello Sir,
What about accumulated depreciation do we have to Dr Acc Depreciation and Cr PPE (Then only it will come to 8000) and;
Thank you for your lectures
praveenmasih says
Hi Chris,
Why are we debiting £3850 in OCI but not in Revaluation reserve??
lightbeetle200 says
Please I don’t understand where the excess depreciation is from at 10:22
JayGab says
Hello Chris,
Please why do we have to use up $3,850 in the reserve?
francihco says
I think that´s because the revaluation reserve was 4,400; the excess depreciation was 550; thus the balance was 4,400-550=3,850 that needs to be used up / removed because of the revaluation decrease / impairment. Thus, we debit by 3,850 the revaluation reserve but the value of the impairment was 4250. Then 4250-3850=400 impairment that goes to PL.
KamagobaS says
Hi Chris,
Would you kindly clarify why you’re saying that all of $3,850 in the revaluation reserve is going to be used?
And where are the entries for accumulated depreciation & depreciation?