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John Moffat.
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ilham9089
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Hi, could you please explain this? Does this happen when the new depreciation charge is lower than the previous one?
John Moffat
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I do explain this in my free lectures!
It happens after we have revalued an assets. The new depreciation charge will be higher than the old depreciation charge. If the company wants to (they do not have to) then the excess may be transferred from the revaluation reserve to retained earnings. the might choose to do this because it is then distributable as dividend (as again I explain in my lectures).
ilham9089
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