Ad free CAclubindia and daily updates on your mobile. Subscribe Now!

Treatment of Revaluation Surplus

work is worship (Service) (2728 Points)

21 February 2010

Hi.. while revaluing the assets, how do we treat the revaluation surplus...

Please advise.

Reply
Follow
Share

4 Replies

First!!!! (student) (162 Points)
Replied 22 February 2010

If there is a revaluation surplus Cr. Baln in ur books of say Rs.1000 and the W.D.V. was Rs.500 and now has decreased to Rs.450 aftter revaluation then entry would be:

Revaluation A/c...Dr 50

To Fixed Asset A/c 50

(Revaln A/c Baln=500-50=450)

If there is a revaluation surplus Cr. Baln in ur books of say Rs.1000 and the W.D.V. was Rs.500 and now has incresed to Rs.600 aftter revaluation then entry would be:

Fixed Asset A/c Dr.... 100

To Revaluation A/c 100

(Revaln A/c Baln =500+100=600)

Regards,

Upgrade to CAclubindia Pro. Subscribe Now!

work is worship (Service) (2728 Points)
Replied 22 February 2010

I dont think so, i think a portion of revaluation surplus each year is transferred to Retained Earning (Revaluation Gains). This is i think as per IAS. i

I am not definite hence asking.

First!!!! (student) (162 Points)
Replied 23 February 2010

Agreed the portion of Revaluation surplus is transferred to retained earnings (which i have already mentioned in the reply, i.e. Revaluation Surplus has already a Credit Balance of Rs.500) in the books but the same cannot be used to declare Dividend ... It would be much more helpful if u could be much more clear and tell me what is wrong in the treatment i have given....

Regards,