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Revaluation reserve

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Revaluation reserve

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • February 28, 2021 at 3:27 am #612043
    andreaskraken
    Member
    • Topics: 57
    • Replies: 30
    • ☆☆

    Hello there

    In cashflow there are two methods which is the direct and indirect method
    So for the indirect method we have to adjust profit in order to enter the figure in the cashflow from operating activities

    So I was wondering whether you adjust revaluation gain on assets in the profit since revaluation is not even recorded in income statement

    So we don’t need to adjust the profit with revaluation gain right ??

    February 28, 2021 at 9:35 am #612079
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54735
    • ☆☆☆☆☆

    Correct. It is not a cash flow and it will not appear as part of the profit in the SOPL.

    Where is obviously might be relevant is in calculating the sale proceeds from any non-current assets sold, as I explain in my free lectures.

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