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:
“A sturdy lad from New Hampshire or Vermont who in turn tries all the professions, who teams it, farms it, peddles, keeps a school, preaches, edits a newspaper, goes to Congress, buys a township, and so forth, in successive years, and always like a cat falls on his feet, is worth a hundred of these city dolls. He walks abreast with his days and feels no shame in not “studying a profession,” for he does not postpone his life, but lives already.”
—Ralph Waldo Emerson (1803–1882)