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Dear P2 Tutor ,
My question is come from exam question acca p2 June 2010.
Question 6:
Ashanti owned a piece of property,plant & equipment (ppe) which cost $12 million and was purchased on 1 may 2008.It is being depreciated over 10 years on the straight line basis with zero residual value.On 30 April 2009, it was revalued to $13 million and on 30 April 2010, the PPE was revalued to $8 million.The whole of the revaluation loss had been posted to the statement of comprehensive income and depreciation has been charged for the year.It is Ashanti’s company policy to make all necessary transfer for excess depreciation following revaluation.The question required to prepare a consolidated statement of comprehensive income for the year ended 30 April 2010 for Ashanti.
My question: After seeing the answer , I don’t understand why the revaluation adjustment is adding back to other comprehensive income?
I don’t know the question, but surely the revaluation adjustment SHOULD go through Comp Income – but as a deduction – you have said that it’s “added” back.
In Statement of Changes, some of the revaluation deficit should be deducted from Revaluation Reserve and the rest from Retained Earnings
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