Land & Buildings revaluation

Property

I have a balance sheet showing Investment Property Land & Buildings with an opening balance of £2,058,332.71 and an accumulated depreciation opening balance of £35,439.00. There was a journal entry called Post Audit DR Acc Dep £23395, CR Retained profit. According to the Asset register the £23395 was the accumulated depreciation brought forward on the 1st April 2014. I believe this has something to do with the new FRS102.

I now need to revalue the investment property land and buildings to £3,415,359.00. On the asset register the original value of the land is down as £660,000 and is not subject to depreciation and buildings at £1,398,333.

The new valuation is land £550,000 and buildings £2,865,358.

Assistance would be appreciated

stevef

Investment land and buildings should not be depreciated this is why the accumulated depreciation was journaled out. If you have an accumulated depreciation balance on the investment property you need to journal that out also.

But here's the rub, investment property should be carried in the balance sheet using the fair value method which must reflect market conditions at the end of the reporting period - that is annual valuations. Any gains or losses in respect of the revaluation are charged to the P&L or I&E or whatever you call these days as Financing and Investment Income and Expenditure.

These comments apply to full blown IFRS compliant accounts, I do not know if there is any relaxation for SME's.