Successive Revaluations
On upward revaluation of a fixed asset which has been previously subject to downward revaluation, an amount of the upward revaluation equal to the amount previously expensed is credited back to the Profit & Loss Account.
- Example:
- Machinery ‘A’ is purchased on 01-04-1999 for $100,000. It is depreciated using the Straight Line Method at the rate of 10% p.a.
| PARTICULARS | First Revaluation | Second Revaluation |
|---|---|---|
| Nature of Revaluation | downward | upward |
| Date of Revaluation | 01-04-2001 | 01-04-2004 |
| Gross Cost | 100,000 | 93,750 |
| Less: Depreciation | 20,000 | 46,875 |
| Net Book Value | 80,000 | 46,875 |
| Revalued - Appraisal Method | 75,000 | 55,000 |
| Increase / (Decrease) in Net Book Value | (5,000) | 8,125 |
| Debit to Profit & Loss a/c | 5,000 | 0 |
| Credit to Profit & Loss a/c | 0 | 5,000 |
| Credit to Revaluation Reserve | 0 | 3,125 |
Read more about this topic: Revaluation Of Fixed Assets
Famous quotes containing the word successive:
“I think, for the rest of my life, I shall refrain from looking up things. It is the most ravenous time-snatcher I know. You pull one book from the shelf, which carries a hint or a reference that sends you posthaste to another book, and that to successive others. It is incredible, the number of books you hopefully open and disappointedly close, only to take down another with the same result.”
—Carolyn Wells (1862–1942)