06-25-2009, 04:00 AM
An excellent observation....
You are correct to point out that the loss of Rs60m resulted because of two factors
1) Revaluation of the land from $5m to $3m
2) A change in the exchange rate from $1=60 to $1=80
It is however impossible to separate the effects of revaluation and changes in exchange rate in the amount of Rs60m.
The entry in the above mentioned case is fairly simple
<b>Dr Revaluation Reserve ----- Rs 60m
Cr Land---------------------------------Rs 60m</b>
Since the changes are directly taken into equity, NO adjustment is required in the Statement of Comprehensive Income.
You are correct to point out that the loss of Rs60m resulted because of two factors
1) Revaluation of the land from $5m to $3m
2) A change in the exchange rate from $1=60 to $1=80
It is however impossible to separate the effects of revaluation and changes in exchange rate in the amount of Rs60m.
The entry in the above mentioned case is fairly simple
<b>Dr Revaluation Reserve ----- Rs 60m
Cr Land---------------------------------Rs 60m</b>
Since the changes are directly taken into equity, NO adjustment is required in the Statement of Comprehensive Income.
