Answer Posted / kafeel
Revaluaton Entry for Fixed assets affects two aspects :
1. Fixed Assets (Debit )
2. Reserve on revaluation on fixed assets.(on face of
liability side of Balance sheet) (credit)
Important Points
1) The increase in value of fixed assets because of
revaluation of fixed assets is credited to ‘Revaluation
Reserve’, and is not available for distribution as
dividend. Revaluation Reserve is treated as a Capital
Reserve.
2) The increase in depreciation arising out of revaluation
of fixed assets is debited to depreciation expense.
4) When any asset, which is revalued, is sold, the part of
loss resulting due to revaluation is debited to
the ‘Revaluation Reserve’.
5) When assets are revalued, every Balance Sheet shall show
for a specified period of years, the amount of increase /
decrease made in respect of each class of assets.
Similarly, the increased / decreased value shall be shown
in place of the original cost.
6) In case of assets such as land and buildings,
revaluation is desirable as their value increases over time
and is carried out every 3 to 5 years. In case of plant &
machinery, revaluation is carried out only if there is a
strong case for it. In case of assets such as vehicles,
furniture & fittings, office equipments etc., revaluation
is not carried out.
7) Revaluation should not result in the net book value of
an asset exceeding its recoverable value.
8) Revaluation does not mean only an upward revision in the
book values of the asset. It can also mean a downward
revision (also called impairment) in the book values of the
assets. However, any downward revision in the book values
of the assets is immediately written off to the Profit &
Loss account.
9) On upward revaluation of a fixed asset, which has been
previously subject to downward revaluation, the amount of
upward revaluation as is equal to the amount expensed
previously is credited to the Profit & Loss a/c.
| Is This Answer Correct ? | 21 Yes | 5 No |
Post New Answer View All Answers
What is limit of turnover for registering under CST & limit of Form 'C '
What is accounts payable?
please give me a last 10 years sbi clerk question and answer paper
If we spend a sum of Rs.10 Lacs towards Processing and Upfront fee for obtaining working capital term loan. can we treat this amount as a deferred revenue expenditure or not
what s BSPL and its significance?
all of interview question about coop bank of oromia
We have a registered dealer under APVAT Act. Our company is manufacturing & marketing of seeds. seeds exempted under vat. recently we have purchased machinery for our new plant construction, against c form. now sales tax dept.not giving the c forms, because our final product is exempted, we are not eligible for c forms. kindly clarify.
which Electrical items is Exciseible
what is an advance against expenses
Short Answer on _______Appropriation
What is the definition of LOSS. Give the formula if any.
Short Answer on _____________Intangible Assets
capital introduced by partners? how it will be shown in tally? (i.e.at the place of Account what we have to post) (at the place of particulars what we have to post) (in which vocher we can post it)
How to calculate closing stock? I have opening stock of 72 lacs (average costing without tax) and purchase of 49 lacs (with tax) and sales of 101 lacs (without tax). What is my closing stock then???? Should i add tax in sales? Where all should tax be included and where all should tax NOT be included? Right now i calculated => 72(no tax)+49(with tax)-101(no tax) = 20 lacs. IS this correct?
A----------involves transfer of money or moneys worth from one person to another
