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hi ,
i have one question that confused me,
Is revaluation shown in statement of equity or income statement , at one place it is stated that gain on non current asset is shown in income statement and other side it is shown in equity ? how to recognize when to show in equity and income statement , kindly help me in this question.It appears at the very end of the Statement of Comprehensive Income (below the profit for the year as appears in the Statement of Profit or Loss.
It also appears in the Statement of Changes in Equity as a movement on the revaluation reserve.
This is all explained in my free lectures on limited companies.
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Hi,
I am a bit confused regarding why we charge depreciation on the revalued amount of the non current asset.
As depreciation is the distribution of the cost(we incured while purchasing) over the assets useful life, and revaluation surplus didn’t actually cost us anything extra.
Thank you in advance.The argument is that if the asset is worth more, then by keeping it (rather than selling it) it is costing more to use it.
Appreciate that we only revalue assets that have increased in value and so it really only applies to things such as buildings.
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