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February 17, 2020 at 8:21 pm
Just for my understanding, would there also be (1) figure in OCE being the extra depreciation which would then be transferred to retained earnings or does this not happen with a change in estimated useful life. Thanks
May 1, 2020 at 8:43 pm
Yes, you are right, there are two possible ways to deal with it:- a) We have to transfer 1 million amount to retained earnings. The entry each year would be :- Dr. Revaluation Surplus 1 million Cr. Retained Earnings 1 million Or:- b) We can transfer full amount of excess depreciation at the end of useful life of asset to Retained Earnings from Revaluation Surplus
September 17, 2020 at 1:55 pm
So you all are saying it can be treated as a revaluation? Why no where else says that? 2015 under new estimated life WDV= 14m Depn chg= 3.5m 2015 under old estimated life WDV= 15m Depn chg= 2.5m
Then recording as a revaluation u would then have to credit PPE and debit Impairment on the income stmt, which makes no sense as the actual depn would not be shown properly, so i do not understand what you all are saying above.
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