note of revaluation of assets

This query is : Resolved

MIHIR GANDHI (Querist)
Follow

20 June 2008 Our firm has revalued the fixed assets as on 31.03.2007. The amount of revaluation was tranferred to partners capital. The said firm was converted into company under part IX of companies act as on 01.05.2007. The auditor of company wants to show the amount of revaluation in the notes of companies books of account. My query is whether the auditor is correct in showing the amount of revaluation by creating the revaluation account and reducing the amount of partners capital.

CA Anand Sarda

CA Anand Sarda (Expert)
Follow

20 June 2008 yes the auditor is absolutely correct. As per AS-10-Accounting for FIXED ASSETS, If a asset is revalued upwards then the amount should be credited to a separate revaluation a/c. and should be shown under reserves and surpluses