How to calculate the Revaluation Reserve

joe222

Example

I have a building that has a historical cost of $100000. The accumulated depreciation is $60,000, therefore Net Book Value is $40,000. It is found that this building actually has a fair (market) value of $120,000.

What is the correct double entry is and how do I calculate my Revaluation Reserve ?

CeeJaySix

Dr acc depn, cr reval reserve $60k.
Dr cost, cr reval reserve $20k.
Total on reval reserve $80k (being the revalued amount $120k less current carrying value of $40k).