• 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

June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

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

Revaluation Surplus

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

  • This topic has 4 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • November 28, 2020 at 1:00 pm #596844
    SreeG
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Q)Simpson purchased a property on 1 April 2006 for $240,000 (of which $60,000 related to land). The building was depreciated at a rate of 2% per annum on a straight line basis, with a proportionate charge being made in the year of purchase. On 31 December 2012 the property was revalued to $820,000 (including $360,000 relating to land).What amount should be included in Simpson’s statement of financial position at 31 December 2012 for the revaluation surplus?

    a) $580,000

    b) $605,200

    c) $604,300

    d) $304,300

    Sir, in this question I get the answer a) $580000 which is obtained by finding the difference between assets of previous and revalued price (820000-240000). Also, I didn’t account for the excess in depreciation as the asset is revalued at the last date in that particular year. But the right answer is c) $604300. Can you please explain how this answer is obtained.

    November 28, 2020 at 5:36 pm #596934
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    The revaluation surplus is the difference between the revalued amount and the net book value of the asset (not the original cost).

    As at 31 December the net book value was 240,000 – (6.75 x 2% x 180,000) = 215,700.

    Therefore the revaluation surplus = 820,000 – 215,700 = $604,300

    November 29, 2020 at 5:24 am #596962
    SreeG
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Ok, I got it. Thanks, sir 🙂

    November 29, 2020 at 6:39 am #596964
    SreeG
    Participant
    • Topics: 8
    • Replies: 8
    • ☆

    Sir, in the context of the above question, I have seen that in some questions, even when the assets are revalued at the last date of a particular year, then the revaluation is considered to have happened from the beginning of that year. So, in this question, isn’t the accumulated depreciation calculated till year 6 and from then, the new depreciation calculated ?

    November 29, 2020 at 9:02 am #596977
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54675
    • ☆☆☆☆☆

    Yes, I have also seen one or two questions in Revision Kits that do this. Their logic is that since we know we are going to revalue then when we calculate the depreciation we take it into account.

    However in any exam questions do it the way we have done for the original question you posted 🙂

  • Author
    Posts
Viewing 5 posts - 1 through 5 (of 5 total)
  • The topic ‘Revaluation Surplus’ is closed to new replies.

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

  • John Moffat on MA Chapter 26 Questions Variance Analysis
  • acowtant on Changes in group structure – examples – ACCA SBR lectures
  • Samantha96 on The Statement of Financial Position and Income Statement (part a) – ACCA Financial Accounting (FA) lectures
  • Ejueyitsi-Toju on What is Assurance? – ACCA Audit and Assurance (AA)
  • Goodness on Accruals and Prepayments (part b) – ACCA Financial Accounting (FA) lectures

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