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Sir,
I need some clarification on these questions below.
1.How to account revaluation surplus and revaluation deficit when there is change in the use of the Asset from IAS-40 to IAS-16?
2.How to Account revaluation surplus and revaluation deficit when there is a change in use of the asset from IAS-16 to IAS-40
and could you please state the journal entries of 1 & 2
Thanks a lotHi,
1. You revalue the asset to FV under IAS 40 at the date of change in use (gains/losses through profit or loss). The asset is then depreciated from that date under IAS 16 and revalued under IAS 16 (gains/losses through reserves).
2. You revalue the asset to fair value under IAS 16 at the date of change in use (gains/losses throuhg reserves). The asset is no longer depreciated (assuming FV model) and subsequent changes in value go through profit or loss under IAS 40.
I’ll let you attempt the journal entries and then I can let you know if you’re right or not.
Thanks
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