Debiting revenue reserve for loss on revaluation

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Querist : Anonymous

Querist : Anonymous (Querist)

19 March 2012 is it in coreect to debit loss on revaluaion to revenue reserve rather than p & l a/c.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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20 March 2012 Revaluation reserve is not an actual profit and therefore this is always to be booked under the head Reserve. If there is surplus then the assets are increased and if there is loss then the value of the asset is decreased. It is not by way of income so that it can be credited to the Profit and Loss account. Therefore, it is to be adjusted under the item reserves and surplus with the amount of revaluation and this items must be shown separately as no income can be distributed out of this reserve in the form of dividend or any other benefit to the shareholders.

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Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2012 Sir, if a company doesn't have enough revenue reserve & they did revaluation of their assets .consequently revaluation resulted in A LOSS...what to do ? bcoz the company doesn't have enough reserves...to setoff loss on revaluation...

where to show this excess loss..( assets value will be decresed..i agree...but where to show this excess loss for whom reserves are not enough !!!)

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