revaluation reserve

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Querist : Anonymous

Querist : Anonymous (Querist)

04 April 2010 Should revaluation reserve on different assets be kept separately or combined?

i mean whether revaluation reserve created on upward revaluation of an asset can be used to write off the loss on downward revaluation of another asset.

Rahul Gupta

Rahul Gupta (Expert)
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04 April 2010 Revaluation reserve should be kept separate.

Yes, upward revaluation can be used to set off against downward revaluation and vice-versa.

Querist : Anonymous

Querist : Anonymous (Querist)

04 April 2010 i want to know
whether revaluation reserve on asset "A" can be used for asset "B".

CA Shiv

CA Shiv (Expert)
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04 April 2010 Yes revaluation reserve is a common pool and you can do that...Its just the matter of presentation in balancesheet...

Rahul Gupta

Rahul Gupta (Expert)
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04 April 2010 Yes Revaluation Reserve of one asset can be adjusted from the revaluation reserve.

For ex.
Upward Revaluation done for P&M...then A/c Entry will be...
P&M............DR......1000
To Revaluation reserve..Cr.....1000

Now, there is Downward Revaluation for building..then A/c entry will be..
Revaluation Reserve....Cr...900
To Building...........Dr..900

In the above entries the Revaluation reserve is adjusted for the increase and decrease in different assets.
I hope it clears your doubt.

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CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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05 April 2010 agree with expert

CA Shiv

CA Shiv (Expert)
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05 April 2010 Thanks ashok sir

shakuntala chhangani

shakuntala chhangani (Expert)
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07 April 2010 Revaluation profit created by revaluing one asset cannot be set off against revaluation loss of another asset. If u refer AS 10 Revaluation part, it says that "if the asset previously revalued upward now revalued downward, revaluation loss should first be adjusted against previous revaluation profit and balance, if any, should be debited to P/L A/c." Further, in sale or disposal part "If asset previously revalued upward is sold at a loss, then loss to the extent of previous revaluation profit is dr. to rev. Reserve and the balance to P/L A/c" These two parts indicate that the rev. profit of one asset can not be set off against rev. loss of another asset.
Regards, CA Shakuntala Chhangani

Querist : Anonymous

Querist : Anonymous (Querist)

08 April 2010 then, we should keep the revaluation reserve created on various asset separately?????

shakuntala chhangani

shakuntala chhangani (Expert)
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08 April 2010 as far as i interpret it, yes.