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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Excess Depreciation transfer bt reveluation and retained earnings
Per the lecture, when there is an increase in the annual depreciation charge due to a high revalued amount, the excess depreciation is transferred from the revaluation reserve to retained earnings. I want to find out when the opposite happens i.e. the revalued amount is less than the carrying value leading to a less annual depreciation charge what happens to the reduction in the annual depreciation charge
Hi,
Nothing happens as this is very unlikely to happen. The higher value of the asset will always lead to an increased depreciation charge over the remaining life of the asset.
Thanks