• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

revaluation model

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › revaluation model

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by P2-D2.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • February 12, 2018 at 10:17 am #436538
    Vipin
    Member
    • Topics: 151
    • Replies: 374
    • ☆☆☆☆

    Suppose an asset has useful life of 7 years. After 2 years, they adopted revaluation model. The total depreciation after 7 years would be either less or greater than cost of the asset. Will it be faithful representation then?

    February 12, 2018 at 1:30 pm #436570
    Vipin
    Member
    • Topics: 151
    • Replies: 374
    • ☆☆☆☆

    the asset cost is 7,000 dollars. The revalued amt at year 2 is 8000. The total depreciation for the 7 year is 8000+1000=9000. The company paid only 7,000 for the asset and they recorded 9000 in the pl. they are not tallying though there are compenents in oci and equity. in this case, company is showing loss of 2,000 over the 7 years. it looks a wrong way of doing it.

    February 17, 2018 at 7:55 am #437703
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    Once the asset has been revalued then the revalued amount is depreciated over the remaining useful life, hence the depreciation on the asset will bring the carrying value down to either nil or its residual value.

    In your example above, when at the end of year 2 the asset is revalued to 8,000 it will then be depreciated over the remaining 5 years down to nil. Although we only paid 7,000 for the asset, it was ultimately worth 9,000 to the business and so to charge that in total through profit or loss is a faithful presentation, don’t forget the reserve transfer that is done in the SOCIE to compensate the sahreholders for the extra depreciation charged on the revlaued asset.

    Thanks

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • umangkumbhat on What is Assurance? – ACCA Audit and Assurance (AA)
  • ahmadhoney on How to register with ACCA?
  • John Moffat on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in