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confusion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › confusion

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 26, 2015 at 6:58 pm #285579
    anjujoseph
    Member
    • Topics: 12
    • Replies: 5
    • ☆

    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??

    November 27, 2015 at 10:23 am #285668
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22714
    • ☆☆☆☆☆

    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 $170,000

    Nothing going near PorL nor statement of comprehensive income

    November 27, 2015 at 3:00 pm #285732
    anjujoseph
    Member
    • Topics: 12
    • Replies: 5
    • ☆

    This not my own creativity entry.. This is june 2013 qtn.. Trailer..
    The entry is written in bbp revision kit Mr.tutor.

    November 27, 2015 at 8:12 pm #285800
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22714
    • ☆☆☆☆☆

    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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