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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Asset impairment – Revaluation Surplus AC
Hi, I am just wondering what we do with the revaluation reserve balance that sits within equity on SFP when assets are impaired please ? I get the concept around charging to OCI first and the SPL and then reducing the NCA value, however as the revaluation reserve account is an accumulated ‘unrealised gains’ in revalued assets then surely if an asset is impaired and this gain is no longer likely to be received then don’t we need to do something to reduce this balance? Otherwise this balance would be overstated as we know it will never be realised? Thanks
Hi,
Yes, as the impairment goes through OCI this will then reduce the revaluation surplus within the SOCIE.
Thanks