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revaluation reserve...HELP!

  • Associate
  • Practice Licence
  • 14 posts
  • # 114942

Hi i cannot seem to get my head around revaluation reserve. I am currently doing level 3 assignment 1 and although we are not really meant to discuss questions, there are no notes regarding revaluation reserve in the course work!! I have looked this up online but i can't seem to get my head round it for double entries :( especially adjusting entries for journal!! starting to panic for when it comes to examinations!!! can osmeone help?

 

thanks in advance 

sarah 

  • Member
  • Practice Licence
  • 18 posts
  • # 114946

Hi Sarah,

 

Revaluation reserve is a balance sheet item in the capital section.

 

When you revalue your fixed assets such as buildings then you will increase the value of the asset by the difference between the current value and the new value. You will then increase the revaluation reserve with the same difference.

 

The journals would be to:

D ASSET (Balance Sheet)

C Revauluation Reserve (Balance Sheet)

This is if there has been an increase in the asset value and do the opposite if decrease in value.



Edited at 04 Apr 2017 08:35 AM GMT

  • Associate
  • Practice Licence
  • 14 posts
  • # 114947

hi Ade Omosanya

Thank you so much for your help! much appreciated!! 

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