How to deal with Revaluation Loss in IAS 16

TTasbiha7y ago

Hi sir, I wanted to ask that how do we deal with a Loss on an Asset after its been revalued? For example, An Asset had a Cost of 240,000 @ 1 april 2010, estimated life of 8 years, carrying value of 180,000 @ 31st march 2012, with an accumulated depreciation of 60,000 (for 2 years) The asset is to be revalued to 160,000 at 1st april 2012 with a revised life of 5 years. And we also have to transfer revaluation surplus to retained earnings annually. Can you please help with this. Thank you.

P2-D2Tutor7y ago#1

Hi, The loss is taken first against any gains held in the revaluation reserve and any excess is recognised through profit or loss. Have a go at your question above, and try to use the layout from the videos for a revaluations and see how you get on. Let me know once you've done it and I can then explain to you where you're right or wrong. Thanks

TTasbiha7y ago#2

And sir if this asset was never revalued before, we will take the loss to SOPL and recognise as loss on revaluation?

P2-D2Tutor7y ago#3

Correct.

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