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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Chapter 5,Example 1 (Revaluation Increase)
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 income
Hi,
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