05 June 2009
Revaluation Reserve is created by a company by transferring the difference between the revalued figure and the book value of the fixed assets.
The Revaluation Reserve is not available for payment of dividends. This view is also supported by the Companies (Declaration of Dividend out of Reserves) Rules, 1975. Similarly, accumulated losses or arrears of depredation should not be set off against Revaluation Reserve. However, the revaluation reserve can be utilised for adjustment of the additional depreciation on the increased amount due to revaluation from year to year or on the retirement of relevant fixed assets.
CAclubindia
