Double Entry Bookkeeping

Question 1

What double entries would you make when; revaluing an asset upwards

Answer 1

1. Dr Cost (by increasing the carrying value to fair value)
2. Dr Accumulated Depreciation (remove all depreciation to date)
3. Cr revaluation surplus
   Gain shown in the statement of total comprehensive income)

Question 2

What is the carrying amount and what is the fair value

Answer 2

Carrying amount - book value from the balance sheet - cost of an asset less the acc depreciation over time - the amount recognised in the statement of financial position

Fair value - realistic value of the asset if sold in todays markets, essentially how much it would cost to replace

Question 3

when introducing tax payable by the company

Answer 3

Dr tax charge (spl) Cr Tax Payable (SFP)

Question 4

When depreciation charges increase due to the revaluation of an asset where can it be transferred and which statement is it present in

Answer 4

Dr Revaluation surplus
Cr Retained earnings
This transfer is shown in the SOCE