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Revaluation

9 February 2009 4,609 views 3 Comments

My company made the following aentriess for revaluation of fixxed assets

Fissed assets Dr
Revaluation AC cr

At the end of the year entries made for dep. are as follows:

Depreciation Account Dr
Fixed assets
(With full value of the assets)

Revauation reserve accounts dr
Depreciation accounts
Depreciation for revalued amount
Depreciation account Dr
Profit and loss account
Revalued depriciation charged to Profit and loss account

Any one can help me whether the transaction are correct or what will be the correct entries. please suggest me with example
Thanks

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3 Comments »

  • ca.lokeshjain said:

    the entry passed by your co. is a correct entry bcoz what ever the depreciation amount related to revaluation is finally credited to P&L a/c. so when u will sell the asset your entry will be like this

    if we say on that day your asset value will be 70 rs. after dep, revaluation res. net of dep is 20rs. and u sell your asset at 50 rs. your entry will be

    bank a/c dr. 50
    revaluation res. a/c dr. 20
    to asset 70

    # 9 February 2009 at 7:29 pm
  • asadlarik3 said:

    Elimination method for treatment of accumulated depreciation after depreciation

    Accumulated Depreciation(dr)
    Asset(cr)
    (with the amount of accumulated depreciation)

    Asset(dr)
    Revaluation Surplus(cr)
    (with the amount of revaluation)

    now at year end charge depreciation on revalued amount, you should now also review your depreciation charge

    depreciation expense(dr)
    accumulated depreciation(cr)

    on more entry MAY BE MADE, here is what has to be done

    calculate depreciation as if no revaluation has been done

    now difference between this depreciation charge and that after revaluation should be transferred from revaluation surplus to retained earnings.

    Your format of question was not understood by me thats why i have given you the model to match your entries, any more questions are welcomed.

    # 10 February 2009 at 8:59 pm
  • asadlarik3 said:

    Correction to above

    Elimination method for treatment of accumulated depreciation after revaluation

    i wish i could edit my earlier post rather than submitting the new one

    # 10 February 2009 at 9:04 pm

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