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FR-IAS16-PPE Revaluation upwards and downwards

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › FR-IAS16-PPE Revaluation upwards and downwards

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by P2-D2.
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  • March 8, 2022 at 11:07 pm #650329
    evaggeliap
    Member
    • Topics: 4
    • Replies: 2
    • ☆

    Hi Chris

    I have a question in chapter 5 PPE, example 2, if you could help me out understand it please.
    https://www.youtube.com/watch?v=0bOdCnwSKu0

    I have not clear why we debited the OCI with the amount of 3.850
    I understand that when we have revaluation gain the amount goes to OCI, so in 31/12/14 (first revaluation upwards) the gain is 4.400 (OCI)

    At the same time, Revaluation reserve should be credited ->4.400 minus 550 = 3.850

    I dont understand how OCI went from 4.400 to 3.850. Do we deduct and from OCI the amount of the depreciation loss (-550) as we do in revaluation reserve account?

    Thank you
    Evaggelia

    March 12, 2022 at 8:42 am #651130
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    The 3,850 is the remaining balance in the revaluation reserve after adjusting for the excess depreciation transfer. We can then only use this amount of 3,850 when revaluing the asset downwards, any excess then goes through profit or loss.

    thanks

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