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Sir,
If entry for revaluation is
Dr.ppe
Cr.p/l
Cr:oci
Then what’s the effect these in consolidated profit and loss statement and statement of financial position. I really confused with debit and credit.
If entry is cr.p&l then what should we do in income statement add or sub??Are you a P2 student? Were you exempt F3?
On a revaluation the double entry is NOT as you have suggested!
Say we have an asset that originally cost $400,000 and is being depreciated over ten years at $40,000 each year
After three years the asset is revalued to $450,000
The double entry would be:
Dr TNCA $50,000
Dr Accumulated depreciation $120,000
Cr Revaluation Reserve $170,000Nothing going near PorL nor statement of comprehensive income
This not my own creativity entry.. This is june 2013 qtn.. Trailer..
The entry is written in bbp revision kit Mr.tutor.The only justification for a credit to PorL is because there was a prior year impairment that was debited to PorL
The credit into OCI is the disclosure of the credit entry into the Revaluation Reserve
A credit into the PorL is a profit / income (this is BASIC F3!) or, in this case, it’s the reversal of a prior year expense
How are you going to operate as an auditor or practice as an accountant when, in your own words, “I really confused with debit and credit”? Amazing! I admire your bravery 🙂
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