10.Chee Ltd chooses revaluation model to measure land. After revaluation at the end of year 2011, the carrying amount of the land was $108,000 while the balance of revaluation surplus was $10,000. The land was revalued again to FV of $95,000 at the end of year 2012. According to AASB 116 Property, Plant and Equipment, what is the entry to record the revaluation at the end of year 2012? (ignore the tax consequence)
Group of answer choices
Dr. Revaluation expense $13,000 Cr. Land $13,000
Dr. Revaluation reserve $13,000 Cr. Land $13,000
Dr. Land $13,000 Cr. Revaluation expense $13,000
Dr. Revaluation expense $3,000 Dr. Revaluation reserve $10,000 Cr. Land $13,000
Answer for this senario is -
Dr. Revaluation expense $3,000 Dr. Revaluation reserve $10,000 Cr. Land $13,000.
In case revalued assets has decreased in the current financial year and company has not enough balance in the revaluation reserve the balance reduction will be charged to profit and loss account of the company for that particular Year.
Revaluation account can not present in a debit value and company can only use the reserve upto the balance available in the same.
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