bpp says:
1. in an upwards revaluation of the fair value, the valuation is taken to the revaluation surplus account.
2. "However, if a revaluation surplus is a reversal of a revaluation decrease that was previously charged against income, the increase can be recognized as income"
am trying to understand #2. Here is an example:
x1: initial recognition at 300.
x2: revalued at fair value to 400. this means
Dr. Intangible Asset 100
Cr. Reval. surplus 100
x3: reval. downwards by 150
Dr. Reval surplus 100
Dr. Income 50
Cr. Intangible 150
x4: reval upwards by 50
Dr. Intangible 50
Cr. Income 50
because there was a previous reversal to the Reval. surplus.
is this the correct understanding?
Ask the Tutor ACCA FR
Upwards revaluation of an Intangible Asset
10y ago#1In essence, yes. I seem to think that the initial valuation is better thought of as a devaluation (Dr Profit or Loss Cr TNCA say 100)
Then revalue upwards by 150
Dr TNCA 150, Cr Profit or Loss 100, Cr Revaluation Reserve 50
Ok?
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