Revaluation of Fixed Assets - Successive Revaluations

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

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