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Illustration 19: Comprehensive Illustration on Revaluation

Financial Reporting

Sir while computing the obligation of Decommissioning as on 31-03-20X5, there is a reduction in PV of decommissioning which is Rs.5000/- hence due to the entry Decommissioning Liability A/c Dr . To Revaluation Surplus A/c , the amount of Rs.5000 is reduced . Then the revised carrying amount of Rs.7180 is added back to the cost of PPE. Then the revalued amount comes to Rs. 1,14,180. My question is since the 5000 got reduced from decommissioning Liability,it ultimately reduced the carrying amount of PPE as similar to cost model.. Can you please explain this part {cost vs Revaluation} Video Details ------------- Ind AS - CA Final Ind AS 16 Property, Plant and Equipment #36. Illustration 19: Comprehensive Illustration on Revaluation

Harini Desu

CA Final

★ 80

17-May-25 00:47

Answers (1)

1. The decommissioning liability is adjusted from the revalued amount and not cost based amount. 2. In cases where there is no revaluation surplus, the changes in decommissioning liability would be transferred to P&L. This is not the case with cost model.

CA Suraj Lakhotia

Admin

19-May-25 11:34

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