# Revaluation Loss and Disposal — AS 10
## Treatment of Revaluation Loss (Downward Revaluation)
When FV < Carrying Amount, the revaluation loss is absorbed in a specific sequence:
1. First: Set off against existing Revaluation Reserve for the same asset (to the extent available).
2. Then: Any remaining excess loss is charged to P&L.
> The sequence is mandatory. You cannot bypass the RR buffer and charge directly to P&L if RR exists.
---
## Journal Entries
When loss ≤ Existing RR:
```
Dr Revaluation Reserve A/c [Loss amount]
To PPE A/c [Loss amount]
```
When loss > Existing RR:
```
Dr Revaluation Reserve A/c [Existing RR balance]
Dr P&L A/c [Excess loss]
To PPE A/c [Total revaluation loss]
```
---
## Question 9 (Part i) — Revaluation Loss Illustration
| ₹ | |
|---|---|
| Carrying Amount before revaluation | 2,16,000 |
| Fair Value | 1,90,000 |
| Revaluation Loss | 26,000 |
| Existing Revaluation Reserve (same asset) | 20,000 |
| Set off against RR | (20,000) |
| Balance charged to P&L | 6,000 |
Journal Entry:
```
Dr Revaluation Reserve A/c 20,000
Dr P&L A/c 6,000
To PPE A/c 26,000
```
---
## Disposal Under Gross Block Presentation — Q9 (Part ii)
Under the Gross Block method, even after revaluation the asset is shown as:
- Gross Block (original/revalued cost)
- Less: Accumulated Depreciation
- = Net Block / Carrying Amount
On disposal:
$$\text{Gain/(Loss)} = \text{Sale Proceeds} - \text{Net Block (CA)}$$
Q9 — Disposal Calculation:
| ₹ | |
|---|---|
| Gross Block | 76,000 |
| Less: Accumulated Depreciation | 62,000 |
| Net Block (CA) | 14,000 |
| Sale Proceeds | 4,000 |
| Loss on Sale → P&L | 10,000 |
---
## Exam Tip (from class notes)
If any question on AS comes in the exam, write 2–3 lines of the relevant AS concept in your own words along with the AS name and number. This secures presentation marks even if the numerical is partially incomplete.