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Query

Radhika (Student) (148 Points)

24 February 2016

what is the treatment of impairment loss after considering revaluation of assets as per AS - 28 ??? whether impairment loss first set off against revaluation reserve created earlier or wholly charged in spl?? & what is the treatment of additional depreciation due to revaluation???

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2 Replies

CA Prateek Garg (CA in Practice) (1444 Points)
Replied 24 February 2016

TREATMENT

Impairment loss is to be set off first to the Revaluation reserve and balance left after such set off from revaluation reserve is to be transferred to SPL.

AMOUNT TO BE SET OFF

There can be two approaches to set off the impairment loss to the revaluation reserve.

1. Set off whole of the amount credited to revaluation reserve at the time of revaluation

2. Set off with amount credited at the time of revaluation as reduced by additional depreciation

AS 28 allows both approaches... management may use either of these 2 approaches