Revaluations

In this lesson

1. 0:00 Non-current assets: cost versus revaluation
2. 0:29 Understanding the revaluation model and fair value
3. 1:53 Step-by-step process for accounting revaluations
4. 2:52 Worked example: basic asset revaluation
5. 4:41 Timing of revaluations and depreciation impact
6. 5:38 Worked example: revaluation with depreciation recalculation
7. 8:34 Annual transfer of excess depreciation to retained earnings
8. 9:57 Worked example: revaluation with annual transfers
9. 14:00 Disposal of revalued assets and surplus realisation
10. 15:01 Worked example: selling a revalued asset

About this lesson

This video covers the step-by-step journal entries needed to account for revaluations, how revaluation timing affects depreciation charges, and the optional annual transfer of excess depreciation from the revaluation reserve to retained earnings. You'll also explore what happens when you dispose of a revalued asset and need to transfer the remaining revaluation surplus. This is essential knowledge for Financial Accounting and Financial Reporting papers, where revaluation questions appear regularly in both objective tests and case study scenarios. The video walks through practical examples showing how to increase asset values to fair value, remove old accumulated depreciation, and calculate the correct revaluation reserve balance. You'll see how revaluation timing matters—whether it happens at the year start, mid-year, or year-end changes your depreciation calculation. The session also explains why companies might choose to transfer excess depreciation annually, and how this protects retained earnings from being artificially reduced by higher depreciation charges on revalued assets. By the end, you'll understand the complete accounting treatment from initial revaluation through to eventual disposal, giving you confidence to handle these questions accurately in your exams.

Duration: 17m