- This topic has 3 replies, 2 voices, and was last updated 10 years ago by
.
-
Posts
-
Dear Sir,
In the BPP text book, on disposal of a revalued asset, they credit disposal account with the balance on Revaluation surplus account. Therefore, the credit balance on Revaluation surplus account is realised in Profit on sale account.
However, in one answer from the revision kit (8.20) for the same issue, the calculation of profit on disposal of non-current asset is nothing involved with the Revaluation surplus account. Accordingly, the balance on Revaluation surplus is transferred to retained profits reserve, but not be reported as profit in the statement of profit or loss
Can you please help explain this?
Thank you!
I cannot comment on the Study Text because I don’t have it.
However the Revision Kit is correct. The profit or loss on sale reported in the SOPL does not involve the revaluation account. And then separately the balance on the revaluation account is transferred to retained profits.
- You must be logged in to reply to this topic.