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Depreciation

SMSalman mishra4y ago
Why excess depreciation is added to retained earnings even though depreciation is expense which is increased ?
John MoffatJohn MoffatTutor4y ago#1
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.
SMSalman mishra4y ago#2
Thank u john
John MoffatJohn MoffatTutor4y ago#3
You are welcome :-)
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