Upward Revaluation on Upward Revaluation Accounts
Upward Revaluation on Upward Revaluation Accounts
Upward Revaluation on Appraisal Surplus Accounts
Upward revaluation is in accordance with the SAS 2002. The procedure is not mandatory, though.
Depreciating upward revaluation (see 22 - Depreciation on upward reval. accounts) means gradual decrease of the incurred revaluated capital adjustment (e.g. account 952).
Example:
The value of a fixed asset purchased on July 1st, 2019 is on September 31st, 2019 estimated on €900,00 by an appraiser. A 5% depreciation rate is applied. Below you can observe the starting data:
First you have to calculate depreciation till September 31st, 2019 in order to establish the book value, that is, the carrying amount on:
Then establish the required percentage of increment of cost and write-off value.
- Carrying amount in accounting records: 100.000,00 -833,34 = 99.166,66
- Appraiser's estimated value: €900,00
- Difference: €2.150,31
- Increment factor: 99.100,00/96.996,66 = 1,021684
Cost increase on revaluated acquisition accounts: 100.000,00 * 0,021684 = 2.168,4
Adjustment value increase on revaluated adjustment accounts: 833,34 *0,021684 = 18,7
Enter line and select type 4. Then select Calculate from the right-click menu, confirm the calculation and post revaluated amount.
You can proceed by recording calculated amounts (manually or by selecting the corresponding function). Then post the line by clicking Post Value Adjustment.
Below you can observe lines of journal entry:
For transparency sake we manually calculated the revaluated amounts and entered them subsequently. To directly calculate upward revaluation and post the amount you can use Calculate function in the right-click menu (see Calculating Upward Revaluation and Impairment).
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After Upward reval.on upward rev.accounts the depreciation amount is separate for purchase valu in one line and for Upward revaluation in second line.
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