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Revaluation of land

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aman (Querist)

21 May 2012 when does a company require to revalue its assets.??
for ex: Land of Rs80000 is displayed in balance sheet. since prices of land has increased manyfold, is it require to revalue it.
is it mandatory to revalue fixed asset...or there any time interval in which asset(land) need to revalue..??

Sanjay Chauhan (IFRS)

Sanjay Chauhan (IFRS) (Expert)

21 May 2012 Excerpt from AS 10

19. The gross book value of a fixed asset should be either historical cost or a revaluation computed in accordance with this Standard. The method of accounting for fixed assets included at historical cost is set out in paragraphs 20 to 26; the method of accounting of revalued assets
is set out in paragraphs 27 to 32.
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1. You may aply revaluation to any particular category of fixed assets.

2. The method of accounting thus chosen will be considered as accounting policy of that company.

3. The reserve so created is non distribuatble reserve.

4. Follow recognisition principles for subsequent increase and decrease in value of revalued assets.

5. Revaluation to be done on suitable intervals.

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