Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 5,Example 1 (Revaluation Increase)
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- April 2, 2021 at 7:58 pm #615787
Dear Chris,
How are you?
I hope you are doing well,
First of all I would like to thank you for your effort and nice informative lectures,
regarding example#1 presentation of the financial statements it was as follow,
As you explained.
Statement of financial position
PPE (NCA) $89,412
Revaluation Reserves (Equity) $25,412
Profit or loss and other comprehensive income
Depreciation Expenses $5,588
Gain (OTI) $27,000
and you did explain for the Accounting journal entries as follow,
1-
Dr Cost PPE $15,000
Dr Accumulated Depreciation $12,000
Cr Revaluation Reserve $17,000
2-
Dr Depreciation Expense $5,588
Cr Accumulated Depreciation $5,588
3-
Dr Revaluation Reserves $1,588
Cr Retained Earnings $1,588
I do understand all those journal entries but Those are related to the following tree items which are 1- PPE 2- Revaluation Reserves 3- Depreciation Expenses .
what about Revaluation Gain Accounting Journal entry how can I work it out to do recognize in Profit or loss and other comprehensive incomeApril 5, 2021 at 8:21 pm #616041Hi,
The revaluation gain is included within the first journal entry where we credit the revaluation reserve/OCI with the $17,000. The accumulated depreciation is removed, cost increased and a gain included in OCI.
Thanks
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