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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Depreciation
Why do we transfer revaluation surplus to retained earnings due to an extra depreciation due to revaluation?
Because, as you will know from my free lectures, the revaluation surplus is not distributable as dividend.
As we depreciate (based on the revalued amount) then the extra depreciation is effectively ‘using up’ part of the revaluation amount and therefore is making it distributable as dividend.
