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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Dec 2018 – Fiskerton
”It appears highly likely that the revaluation was implemented in the interim financial statements to try to maintain a satisfactory gearing ratio.”
We are increasing the non-current assets and not touching the long-term debt and not even the equity.
Hence, how it is affecting the gearing ratio when doing a property revaluation please?
If you revalue you increase PPE and Revaluation Reserve – the latter is part of equity – so gearing will go down.
