Resolved: Revaluation Surplus
Are there any assets we recognize revaluation surplus on and how do we record it?
3 answers ( 1 marked as helpful)
Hi,
Thank you for this question!
The answer is: it depends :)
If you follow the International Financial Reporting Standards (IFRS), you can create a revaluation surplus to value upward any changes in the market value of fixed assets - buildings, equipments, etc.
The accounting entries for that are:
Dt: Fixed Asset
Ct: Revaluation Surplus (as this is an equity account which increases on the credit side)
However, a revaluation surplus is not allowed under US GAPP.
Best,
The 365 Team
Hi,
I'd like to know what this concept of "revaluation surplus" refers to and when it is relevant.
Thanks
Hi :)
"Revaluation surplus" refers to the increase in the value of an asset that is recorded when a company revalues its assets to reflect their current market value rather than their historical cost. This concept is particularly relevant under accounting standards such as International Financial Reporting Standards (IFRS), where companies have the option to revalue certain non-current assets (like property, plant, and equipment) to their fair market value instead of maintaining them at their original cost less accumulated depreciation.
Please let me know if you have any additional questions on this topic.
Best,
365 Team