Revaluation Profit

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Dear all, can u tell me whether profit arising from revaluation of land and building be used for settingoff carryforward loss from previous years

Replies (3)

ACC. TO ME

LOSSES CAN BE SET OFF FROM FREE RESERVES AND REVALUATION PROFIT WILL BE CREDITED INTO REVALUATION RESERVES WHICH IS NOT A FREE RESEVE

SO SET OFF CAN NOT BE DONE.

Dear Sivaprasad,

Here in this case profit on revaluation of land and building is not realised gain. Imean to say it is not realised in cash. For setting off past losses there must be realised gain / profit to br set off against.

Here in this case for revaluation portion "Revaluation Reserve A/c" will created and it will only be available for setting off depreciation allowance like Depreciation on revalued amount of land & bulding.

 

I think this limited explanation is capable to make you understand. 

No it is not allowed. Revaluation Reserve is not a free reserve which allow past losses to be adjusted against the same.


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