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i use version of bpp, i have a question about depreciation in the case of revaluation.
according to providing an instance,
a land and and a building separatedly cost $20000 and $30000, the former would not be depreciated and the latter would be depreciated by the straight-line method to a nil residual value over 30 years.after 5 years , the business premises is now worth $150000, divided into
land $75000
building $75000
debit building -cost $45000
building-accumulated depreciation $5000
land-cost $55000
credit revaluation reserve $105000
my doubt is here which building-accumulated depreciation is $5000 balanced at credit before revaluation,through above entries transferred to debit which means the balance of accumulated depreciation is nil,however the instance appears the balance is still $5000.
accumulated depreciation after revaluation of an assetWell the rule says that on revaluation the accumulated depreciation is reversed. Thus the accumulated depreciation should now be zero. This is called the revaluation model where the net book value of a revalued asset is the revalued amount less depreciation from the date of revaluation.
thank u very much for your help, i saw your key several times in fact that i agree with your thought, however, by contrast the view about depreciation on content of course book has been still maintained in doubt since then .oh my god ,until today i see the book again, i find the mark of nil balanced in the bulinding-accumulated depreciation. i am thankful to you. i hope you could continue to concern my problem. ^-^
@alkemist said:
Well the rule says that on revaluation the accumulated depreciation is reversed. Thus the accumulated depreciation should now be zero. This is called the revaluation model where the net book value of a revalued asset is the revalued amount less depreciation from the date of revaluation.
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