Accounting for IGCSE & O level - Accounting Procedures (Section 15 - No. 17)
What effect does the revaluation of an asset have on the financial statements?
Increases the book value of the asset.
Increases depreciation expense in the future.
Increases current year net profit (if an upward revaluation).
Decreases retained earnings.
Explanation
An upward revaluation increases the book value, which increases depreciation expense in future periods.
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