01Jan08 building valued $100
Economic life 20yrs
Depn method: straight line
Nil residual
31Dec08 revalued downwards $91.2
31Dec09 revalued $91.8
What are the revaluation adjustment at 31Dec08 and 31Dec09?
Could anyone help me handle this questions as the example in the text book did not give instruction on decrease revaluation?
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Help with this questions related to revaluation of PPE
Depreciate for year 2008 by 5 gives cv of 95
Revalue to 91.2 Dr PorL 3.8 Cr TNCA 3.8
Depreciate for 2009 (91.2/19) ie by 4.8 gives cv of 86.4
Revalue to 91.8
HOWEVER!!! We cannot reverse a revaluation to a level that is greater than what it would have been had we not impaired in the first place. In this example, we cannot reverse to a level >90 (100 - 2 year's depreciation)
Dr TNCA 3.6 and Cr PorL 3.6 gives a cv of 90
Now revalue Dr TNCA 1.8 Cr Revaluation Reserve 1.8 gives a cv of 91.8
Ok?
Thanks ACCA Tutor so much. I fully understand the solution
You're welcome
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