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Can the asset revaluation reserve amortized or written off to the P and L every year?
Wiki User
∙ 11y ago
No! the asset revaluation reserve equal to the amount of depreciation charged during the year on the revalued asset should to be transaferred to the Retained Earning.
Wiki User
∙ 11y ago
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What is surplus on revaluation of asset?
Surplus on revaluation of assets means that on the even of revaluation, more assets has appreciate in their value then depreciate.
Is revaluation account a real account or nominal account?
When a company (or any legal entity) is of the opinion that the value of an asset has appreciated (or) depreciated much than the recorded historical value, revaluation of asset is undertaken. This necessitates us to create an account known as "revaluation A/c". It is understood that, the outcome of revaluation may be a gain (or) loss. As per Golden rule of Accounting, revaluation a/c is a nominal a/c since the a/c measures the gain (or) loss of the asset.
What is revaluation of fixed assets?
Revaluation is the upward or downward adjustment in the value of a fixed asset to account for major changes in its fair market value. FASB does not allow upward revaluation.
Is reserve an asset or liability?
It's an asset.
What is difference between revaluation account and realization account?
Revaluation account and Realisation account both are nominal account. the purpose of revaluation account is taking the effect of fluctuations in asset & liabilities in their books while purpose of realisation account is to closing the books of accounts of a comapany or a firm. Revaluation a/c is made when any fluctuation in value of an asset takes place. realisation a/c is made at the time of liquidation of a company or a firm.
Is revaluation reserve part of TNW?
Revaluation reserve is an intangible asset so it can't be part of tangible net worth . anjan
How does Asset revaluation reserve affect cashflow statement. Is it even included in cashflow statement. Or does the increase in freehold property offset the increase in revaluation reserve?
it is included in cash flow statement
What are the journal entry for asset revaluation?
debit asset and credit asset revaluation
Revaluation Surplus is it a non-distributable reserve?
it is non-distributable as it represents unrealised profits on the revalued assets. it is another capital reserve. the relevant part of a revaluation surplus can only become realised if the asset in question is sold, thus realising the gain.
What is surplus on revaluation of asset?
Surplus on revaluation of assets means that on the even of revaluation, more assets has appreciate in their value then depreciate.
Is revaluation account a real account or nominal account?
When a company (or any legal entity) is of the opinion that the value of an asset has appreciated (or) depreciated much than the recorded historical value, revaluation of asset is undertaken. This necessitates us to create an account known as "revaluation A/c". It is understood that, the outcome of revaluation may be a gain (or) loss. As per Golden rule of Accounting, revaluation a/c is a nominal a/c since the a/c measures the gain (or) loss of the asset.
What is revaluation of fixed assets?
Revaluation is the upward or downward adjustment in the value of a fixed asset to account for major changes in its fair market value. FASB does not allow upward revaluation.
Is reserve an asset or liability?
It's an asset.
What is an amortized account?
Amortized account is same like depreciation account which is used to reduce the value of intangible asset over it's useful life span through income statement.
Is there any relationship between revaluation reserve and fair value of assets?
Fair Value: In accounting and economics, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. One example of where fair value is an issue is a college kitchen with a cost of $2 million which was built five years ago. If the owners wanted to put a fair value measurement on the kitchen it would be a subjective estimate because there is no active market for such items or items similar to this one.Source:http://en.wikipedia.org/wiki/Fair_valueRevaluation Reserve: An accounting term used when a company has to enter a line item on their balance sheet due to a revaluation performed on an asset. This line item is used when the revaluation finds the current and probable future value of the asset is higher than the recorded historic cost of the same asset.A revaluation reserves fall under the category of supplementary capital, in that it does not reflect ordinary business results. Because of this revaluation, reserves typically are not counted as capital that can be leveraged for financial institution's, such as a bank's, contractual provisions.(Source:http://www.investopedia.com/terms/r/revaluationreserves.asp)Relationship between the Two: The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be helpful in order to decide whether to invest in another business. If a company wants to sell one of its assets, it is revalued in preparation for sales negotiations.(Source:http://en.wikipedia.org/wiki/Revaluation_of_fixed_assets)Therefore, revaluation reserve is added to the balance sheet as per the fair value of the assets. The relationship between these two terms is fundamental. By assessing the fair value you can reevaluate an asset and add the extra/added value in the balance sheet as Revaluation Reserve.
What is difference between revaluation account and realization account?
Revaluation account and Realisation account both are nominal account. the purpose of revaluation account is taking the effect of fluctuations in asset & liabilities in their books while purpose of realisation account is to closing the books of accounts of a comapany or a firm. Revaluation a/c is made when any fluctuation in value of an asset takes place. realisation a/c is made at the time of liquidation of a company or a firm.
Is a Reserve account an asset or liability?
It is assets
