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 lay awake awhile, watching the ascent of the sparks through the firs, and sometimes their descent in half-extinguished cinders on my blanket. They were as interesting as fireworks, going up in endless, successive crowds, each after an explosion, in an eager, serpentine course, some to five or six rods above the tree-tops before they went out.”
—Henry David Thoreau (18171862)