Muhammad Amir - 02 Mar 2008, 09:22 am
Dear quest2008,
I don't know about UK-GAAP, however for IFRS,
Land should be valued at cost or Revaluation Under IAS-16 Property, Plant and Equipment, If Revaluation procedures are carried out then it should be for all assets of single class I mean if an entity has decided to re-value it lands then it should revalue all the lands not just a single land.
Buildings-Industrial, should be treated in accordance with IAS-16 Property, Plant and Equipment and there are two possibilities to disclose Buildings in Final Accounts one at cost using cost model and other is at Revaluation under Revaluation Model specified by IAS-16, if an entity has decided to revalue it buildings then it should be noted that all the buildings qualified for industrial purposes are being revalued, if entity has decided to use revaluation model then the surplus depreciation(often called as incremental depreciation) charged due to revaluation procedures can be transferred from revaluation surplus to retained earnings.
The respective entry for this procedure will be.
Dr:Revaluation Reserves::::::::::XXX
Cr::::::::::Retained Earnings:::::::::::XXX
Buildings-Investment Property should be treated in accordance with IAS-40 Investment Property, It has been started in IAS-40 that all investment properties should be valued using either fair value model i.e. at revaluation or at cost model i.e. at cost.
If an entity has decided to adopt Fair Value Model then it should revalue all of its assets at revaluation and all revaluation gains should be credited to Profit and loss account and therefore they should not be transferred to Revaluation gains.
If an entity has decided to adopt Cost Model after initial recognition, then it should treat it’s investment properties using the cost model of IAS-16.
I hope this will help you, For UK-GAAP you can consult with some one practicing it but as far as I know there is very minor difference inter-se.
Regards,
Muhammad Amir
I don't know about UK-GAAP, however for IFRS,
Land should be valued at cost or Revaluation Under IAS-16 Property, Plant and Equipment, If Revaluation procedures are carried out then it should be for all assets of single class I mean if an entity has decided to re-value it lands then it should revalue all the lands not just a single land.
Buildings-Industrial, should be treated in accordance with IAS-16 Property, Plant and Equipment and there are two possibilities to disclose Buildings in Final Accounts one at cost using cost model and other is at Revaluation under Revaluation Model specified by IAS-16, if an entity has decided to revalue it buildings then it should be noted that all the buildings qualified for industrial purposes are being revalued, if entity has decided to use revaluation model then the surplus depreciation(often called as incremental depreciation) charged due to revaluation procedures can be transferred from revaluation surplus to retained earnings.
The respective entry for this procedure will be.
Dr:Revaluation Reserves::::::::::XXX
Cr::::::::::Retained Earnings:::::::::::XXX
Buildings-Investment Property should be treated in accordance with IAS-40 Investment Property, It has been started in IAS-40 that all investment properties should be valued using either fair value model i.e. at revaluation or at cost model i.e. at cost.
If an entity has decided to adopt Fair Value Model then it should revalue all of its assets at revaluation and all revaluation gains should be credited to Profit and loss account and therefore they should not be transferred to Revaluation gains.
If an entity has decided to adopt Cost Model after initial recognition, then it should treat it’s investment properties using the cost model of IAS-16.
I hope this will help you, For UK-GAAP you can consult with some one practicing it but as far as I know there is very minor difference inter-se.
Regards,
Muhammad Amir