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Dear Mr.Mike
Sir
Revaluation is based on the credit base, so if a NCA is revalued from 100 to 200,
Dr Asset 100
Cr Revaluation 100But when it comes to Revaluation surplus regarding depreciation of revaluation.
It is like
Dr Revaluation surplus
Cr Retained Earning.I dont know what i am missing.
Could u please distinguish R surplus from RR using entries?
In my thought
Revaluation surplus goes to SOCIE and SOFP.RR goes to Other comprehensive income.
Right?
These two qestions are what i want to know…
Thank u for previous answers;)
Sir in terms of investment properties,
Should i know both methods called Cost model and Fair value model?I think…. i dont know the difference between revaluation surplus and revaluation gain …..sir
“Sir in terms of investment properties,
Should i know both methods called Cost model and Fair value model?”Yes, but it’s most improbable that there will any more than 2 marks based on IAS 40
When we revalue an asset, the annual depreciation expense is calculated on the revalued amount. But why should the reported profits for the year be hit with that excess depreciation? If we hadn’t revalued, the depreciation would have been based on cost and would therefore have been much lower
So, although it’s not mandatory, it’s seen as good practice to make an annual transfer from revaluation reserve to retained earnings to compensate for the additional depreciation that has been charged against the profits for the year
Is that ok for you?
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