Electricity company

in the replacement account---

  we debit the account first with the total cost of the asset...(calling it a FIXED ASSET AS OF NOW MIGHT NOT BE APPROPRIATE)

   then find out the revenue compoonent in the asset by comparing it to the current cost of replaced asset and the other calculations as necessary.....

    then the revenue component of the asset will be removed (credited) from the replacement account and tranfered to revenue account like repairs acc..

 and the capital expenditure will be tranfered to the FIXED ASSET account now.....

hence the replacement account will be left out wid no furthur balance...as the apportionment to revenue and capital have been done as required...

thanku prem but in study material they have debited replacement account with current cost of replaced account but i downloaded parveen sharma 's class and there he eplained the same thing which u exxplained me.

one more doubt can we prepare fixed asset account? sir told that it fa account cannot  be prepared however it is prepared in study material yar? what do u think is correct? 

then which book are u refering?