Dear Forum Member
Please provide me info about the treatment of Revaluation of Fixed Assets in Fixed asset Register.
Can we add or subtract the amount of revaluation from WDV and charge depreciation on current value or the procedure is diff .
section 235 of the Companies Ord. 1984, permits companies to revalue their assets. In this situation, the difference between present NBV and revalued amount is credited to a separate account "Surplus on Revaluation of Fixed Assets". This account is displayed on the face of Balance Sheet after capital and Retained Earnings (Unappropriated Profits), or in other word after equity and above Long Term Loans. Assets are re-booked at revalued amount and depreciation (Amortization) is charged on new amount. However, all relevant fact must be disclosed in a separate note. Please note that Surplus on Revaluation of Fixed Assets account can't be used for any distribution of dividend or appropriation.
Depreciation before the revaluation and depreciation after revaluation is calculated. The difference in these two amounts will be charged to revaluation surplus.
Could u please explain it with exapmle
For example, an asset having NBV of Rs. 1,000 (cost 3,000 & Acc. dep 2,000) was revalued at Rs. 1,500. the accounting entry for this revaluation will be
Asset (Dr.) 500
Revaluation surplus (Cr.) 500
Additional depreciation on 500 will be debited to surplus subsequently.
When an asset is revalued, the fixed asset register is also updated. (Also consider impact on deferred taxation, if applied)
hi
i want to be assist i m thinking about to do pipfa.plz guide me about it?????is it reasonable or not???????