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Chapter 20
Chapter 6
Example 1
A building with an original cost of $100,000 and a current carrying amount of
$70,000, was revalued to $120,000 on 31 December 20X2. At that date, the
remaining useful life of the building was considered to be 12 years and the
building was depreciated using the straight-line basis.
Required:
Prepare the ledger account entries required to account for the
revaluation of the building and calculate the depreciation charge based
upon the revalued amount.
Example 1: Solution
Step 1: Revalue the asset from cost to revalued amount:
Debit Non-current asset cost account $20,000
Credit Revaluation surplus account $20,000
Step 2: Remove existing accumulated depreciation to the revaluation
date:
Debit Accumulated depreciation account $30,000
Credit Revaluation surplus account $30,000
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