Why excess depreciation is added to retained earnings even though depreciation is expense which is increased ?
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Depreciation
Depreciation is indeed an expense, and depreciation will have been charged in the SOPL on the revalued amount (which will, of course, also reduce the retained earnings).
The excess depreciation is transferred from the revaluation reserve to retained earnings because it becomes distributable as dividend, whereas the revaluation reserve is not distributable.
Thank u john
You are welcome :-)
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