Dear sir,
I have a query regarding this question
Binkie Co has an item of land carried in its books at $13,000. Two years ago a slump in land values led the company to reduce the carrying value from $15,000. This was taken as an expense in profit or loss. There has been a surge in land prices in the current year, however, and the land is now worth $20,000.
Account for the revaluation in the current year.
Is there a method to do this question as I'm very confused as to what amounts to put in the journal entries?
Thanks!
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Revaluation regarding PPEs
9y ago#1This is a revaluation upwards of $7,000 following an earlier impairment of $2,000
1) Reverse the impairment
Dr Land $2,000
Cr Profit or Loss $2,000
2) Revalue the asset to $20,000
Dr Land $5,000
Cr Revaluation Reserve $5,000
OK?
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