[derartem]

Cheers Mike – fanntastic help once again.
Now its all clear.

[derartem]

Hi there,

I have a problem with reversal of impairment loss – there is an exercise in my study text which I have a trouble dealing with.

We have a 15 years leasehold property acquired in 2007 at 30m and revalued to 25.2m which led to 2.8m impairment charge in 2008 (this figure of 25.2 is given in 2009 trial balance) and then revalued again to 24.9 at the year end 2009.
They show that in 2009 it should be dealt with as follows:
amount b/d per question as at 31/12/2009 – 25.2m;
dep’n (1.8m), which is 25.2/14
Reversal of impairment loss 1.5m
Total revised amount 24.9m

Now I have a question re where have they seen impairment reversal? As far as i can understand we are talking of the value going down all the time.

Would appreciate any advice.

Thank you,

Art

[derartem]

Thank you again Mike – now its all clearer!

Cheers,

Art

[derartem]

Thank you very much Mike! I get what you mean re upwards revaluation.

But I didnt quite get about downward revaluation – do we Dr Revaluation Reserve & Dep’n and Cr what?

Suppose the situation: A property is revalued at year end to 10K from 17K. Remaining useful life is 20 years and its depreciated on a straight line basis.
What do we do here?

Appreciate your advice!

Cheers,

Art

[derartem]

Hi there,

Thank you for previous posts and replies.

Can you please advise on a situation when there is a revaluation decrease and depreciation?

If there is a revaluation increase we do the following: Increase Asset Value, Increase Reval Reserve and Increase Accumulated Depreciation (Dr Asset, Dr Acc’d Dep,n & Cr Reval Surplus)

But do we do just the opposite of the above when its a decrease in value?

Thank you,

Art

[derartem]

Hi Prit,
My email is derartem@yandex.ru.
I see you have done some reading already – as i will start my reading in a while we need to figure out some sort of study plan to suit both of us.
Can you email me and we will take it from there?
Cheers

[Author]

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