Dividend

The revaluation surplus is, of course, an unrealised profit and that surplus is depreciated over the remaining useful life of the revalued asset

But, of course, you’re correct! That surplus / excess depreciation is reducing the realised profits for each year and thus reducing the extent of profits available for distribution

But that’s where the law steps in! As each year passes that excess depreciation on the unrealised revaluation surplus is treated as though it were a realised profit

So when calculating the extent of distributable profits, in its simplest way, the year’s figure for profit after tax is then increased by the amount of that excess depreciation caused by the revaluation of the asset

Is that ok!

Your last post is correct

Your second post I shall ignore

Your first post is incorrect

The revaluation surplus is, at date of revaluation, unrealised

But as time passes, each year a part of that revaluation becomes realised

If I revalue an asset by $20,000 and that revalued asset has an effective remaining useful life of 10 years, then, over that 10 year period that revalued amount becomes realised … at the rate of $2,000 each year

So, as per your last post, we COULD, if we wanted to follow ‘good practice’, transfer that excess annual $2,000 depreciation out of Revaluation Reserve into Profit of Loss Reserve / Retained Earnings

But we may choose not to follow ‘good practice’ and simply not do that transfer

But, even though we didn’t make the transfer, for the purposes of calculating distributable profits, we treat that annual excess depreciation as though it were a realised profit and, thus, include it as distributable

OK?

Perfect!