21 April 2012
We have partnership firm and charging depreciation as per Income tax Act. As on 31.03.12 we have revalued the immovable properties. kindly suggest a)calculation of revaluation reserve i.e. whether revaluation reserve to be calculated revalued amount as on 31.3.12 minus(-) op.WDV and addition during the year or first calculate WDV as on 31.3.12 and than calculate revaluation reserve by deducting WDV from revalued amount. b) depreciation on revaluation reserve i.e dep is calculated for whole of the year or as per income tax Act i.e. before 180 day 100% dep and after 180 days 50 % dep.
Kindly explain the treatment for the financial year ended 31.3.12
IF YOU REVALUE THE AS ON 1/04/XXXX THAN IT MUST BE ON CLOSING WDV OF NEXT YEAR AND WHAT EVER INCREASE IN VALUE SHALL BE UNDER REVALUATION RESERVE , LIABILITY SIDE.
SECOND THING WHAT EVER DEPRECIATION CHARGED TO P & L A/C CONSIDERING LIFE OF REVALUED ASSET ..THERE IS PARTITION OF DEPRECIATION.. 1. DEPRECIATION ON CLOSING WDV OF PREVIOUS (I.E. AMOUNT WHICH IS REVALUED ) 2. REVALUATION AMOUNT
HERE YOU CAN DECREASE YOUR REVALUATION RESERVE SAME AMOUNT WHICH IS EQUAL TO DEPRECIATION ON REVALUATION AMOUNT ONLY.
CAclubindia
