Revaluation of fixed asset
This query is : Resolved
08 February 2014
please help me. I have got a case where in there's a partnership firm with 4 partners . 10 years back the value of plot of land was 10 lacs. each partners had contributed 2.5 lacs each. in 2014 the land was revalued and its value is 1 crore. now my questions are
1)is revaluation permissible?
2) in accounting how it will be treated?
3) is it taxable and what will be its tax impacts?
please help me..
10 February 2014
1. yes revaluation is permissible.
2. you increase the value of the asset and credit the equivalent amount to revaluation reserve
3. it is not taxable and there is no tax impact.
2. you increase the value of the asset and credit the equivalent amount to revaluation reserve
3. it is not taxable and there is no tax impact.
13 February 2014
1. yes
2. Book the entry Asset a/c
To Revaluation Reserve
3. no tax liability.
2. Book the entry Asset a/c
To Revaluation Reserve
3. no tax liability.
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