When an item of property plant and equipment is revalued what should be revalued?
34. After recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably should be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
What is revaluation method of depreciation?
A method of determining the depreciation charge on a fixed asset against profits for an accounting period. The asset to be depreciated is revalued each year; the fall in the value is the amount of depreciation to be written off the asset and charged against the profit and loss account for the period.
What is revalued amount?
Revaluation is an adjustment made to the recorded value of an asset to accurately reflect its current market value. When purchasing a fixed asset, it is usually recorded at cost-price.
How is accumulated depreciation treated when revaluing an asset?
The difference between those two is 1,500 so there’s your gain again found by a shorter method. Proportional restatement. Accumulated depreciation is restated proportionately with the change in the gross carrying amount of the asset such that the net book value of the asset after revaluation equals its revalued amount.
How is the value of an asset revalued?
Under revaluation depreciation method, the asset is valued at the end of each financial period and this revalued amount is compared with the value in the beginning of the period. The reduction in the value is recorded as depreciation for that year.
How to calculate the revaluation surplus surplus amount?
Revaluation surplus amount To calculate this we need to know the carrying amount of asset at the time of revaluation which is cost less accumulated depreciation of five years. Depreciation for five years is: = 100,000 / 20 = 5,000 x 5 = 25,000
How is the annual depreciation of an asset calculated?
When there are new purchases or disposals of assets during the year then the annual depreciation under revaluation method will be calculated by using the following formula: The value of the loose tools at the beginning of the year was $10000.