accounting for downward or upward revaluation

Q.1: We purchase a machine on 01.05.04 at a cost of rs. 100000. After 2 year we revalued that assets downward. and after 1 yaer we want to revalued that assets upward.

What is the accounting treatment for that transaction? (if rate of depreciation is 10% p.a. by w.d.v.)

Replies (3)

when you revalued the asset for 1st time it was downward reveluation so you should debit the P&L A/c by the amount of revaluation.

Then after 1 year you want to revalue it upward so you should credit P&L A/c because the previous downward revaluation was accounted through P&L A/c.

 

HMMMMM.............. M NOT SURE BUT ACCORDING TO ME MR. KETAN IS ABSOLUTELY WRONG, HOW CAN ANYBODY SHOW REVALUATION LOSS IN P&L A/C , IF ALLOWED IT WILL BE A BIG SOURCE TO DECREASE UR PROFITS BY DOING THIS EVERY YEAR.

 

AS PER AS 10 FIXED ASSETS WE CANT SHOW REVALUATION OF ASSETS IN P& L A/C WE HAVE TO CREATE REVALUATION RESERVE A/C AND IT SHOULD BE DISCLOSED IN BALANCE SHEET.........

In accordance with AS 10 Mr ketan is very correct

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