Could you explain what’s the logic of transferring the any excess depreciation as a result of the revaluation?( DR revaluation surplus and CR retained earnings)
Why should retained earnings be artificially reduced by excess depreciation simply because the company has decided to revalue an asset?
That excess depreciation is reducing the amount of profits available for distribution because, unadjusted, it will continue to sit in revaluation reserve which is an undistributable reserve