06-11-2010, 11:58 PM
salam
can any1 plz explain deferred tax implication when an asset is revalued from cost to FV and there is revaluation surplus..
plz also explain the treament of incremental borrowing in this case, ie how deferred tax will be created when making an entry for incremental dep.
to start with, lets suppose the cost of the asset is 1000 and it is being depreciated at 10% .. after 2 years when WDV is 800 the entity revalues the asset to 1200 keeping the dep rate same ie 10%..therefore we hav a revaluation surplus of 400.. now plz continue further with general entries how to record the deferred tax while recording revaluation surplus and later incremental dep..
thanks
can any1 plz explain deferred tax implication when an asset is revalued from cost to FV and there is revaluation surplus..
plz also explain the treament of incremental borrowing in this case, ie how deferred tax will be created when making an entry for incremental dep.
to start with, lets suppose the cost of the asset is 1000 and it is being depreciated at 10% .. after 2 years when WDV is 800 the entity revalues the asset to 1200 keeping the dep rate same ie 10%..therefore we hav a revaluation surplus of 400.. now plz continue further with general entries how to record the deferred tax while recording revaluation surplus and later incremental dep..
thanks
