- This topic has 1 reply, 2 voices, and was last updated 11 years ago by
.
- Posts
As stated in the IAS16, the difference of previou depreciation and new depreciation after revaluation needs to be transferred from revaluation surplus to retained earning. But this kind of amount will not be realised in cash or cash equivalents, how to distribute the amount as profit to their shareholders?
You don’t distribute profits to shareholders! Can you imagine being a shareholder and receiving notice from the invested company that you are to receive $X profits
Cash is distributed and the amount paid / appropriated is shown as a reduction in Retained Earnings within the Statement of Changes in Equity
In addition, unless something has changed and I missed it, the annual transfer from Revaluation Reserve to Retained Earnings is “suggested” rather than “required”
Hope that helps
- You must be logged in to reply to this topic.