Revaluation reserve after sale of asset
Asked Mar 10, 2012, 05:08 AM
Hi, I am quite confused about what happens to the revaluation reserve after an asset is sold.
Assuming the asset's original cost was $100, and afterwards get revalued to $150.
Accounting entry - Dr Asset $50, Cr Revaluation Reserve $50
When the company sells the asset for $180, the treament is to:
Dr Cash $180, Cr Asset $150, with a Gain on disposal of $30 shown in the P&L.
Then what happens to the Revaluation Reserve?