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Would you please state at what circumistances that the balance of the assest revalution reserve release to proift and loss or to the retained earings in the subsequent period ?
When a revalued asset is sold, the related revaluation surplus can be transferred to retained earning in the statement of changes in equity – it can NEVER be recognised directly in profit or loss.
Also, the excess depreciation expense each year can be transferred to retained earnings – again in the statement of changes in equity.