Treatment of Revaluation reserve(UrgenTT)

Others 3045 views 2 replies

Q1) Please mention the book entries?

Q2) Treatement and disclosure as per Companies Act,1956? Will the revaluation reserve be a part of Reserves & Surplus?

3) How many years,  to be written off?

Replies (2)

 

Any upward revaluation of a fixed asset is credited to an account known as the Revaluation Reserve. To pass the entry, you'll have to debit the Fixed Asset a/c and credit the Revaluation Reserve a/c.

As per companies act schedule VI, Revaluation reserve is to be shown on the Liabilities side of the balance sheet under the head "Reserves and surplus"

There's no specified period of writing it off.

"Any upward revaluation of a fixed asset is credited to an account known as the Revaluation Reserve. To pass the entry, you'll have to debit the Fixed Asset a/c and credit the Revaluation Reserve a/c.
As per companies act schedule VI, Revaluation reserve is to be shown on the Liabilities side of the balance sheet under the head "Reserves and surplus"
There's no specified period of writing it off."

THIS STATEMENT IS RIGHT BUT,

As per AS the depreciation on subsequent years  on the revalued portion of the fixed assets has to be credited to  P/L A/c.

SUM,

Book value on 31/3/9 Rs. 100000, Revaluation on 1/4/9 100000. new value of assets 200000. if depreciation rate 10%, then in 31/3/2010 it will be,

P/l a/c Dr 20000 to Depreciation A/c Dr 20000
 & Revaluation reserve A/c Dr 10000 to P/l  A/c  20000

Alternatively

P/l A/c Dr 20000, To Depreciation A/c 10000, To Revaluation Reserve A/c 10000.

 

 


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