IAS 16 - PPE revaluation

[JBHF]

Hello

Our company is acquired and the parent company revalued one of the PPE assets, lets say assetA. The reval results new value of 100K from the carrying amount (net after depreciation) of 80K. In this case the ravl gain is 20K where I:
DR PPE account 20K, CR Revaluation gain (P&L) 20K.
So when I did the journal, the increase of 20K PPE is a high level (account level).

My question is, do I actually need to do the revaluation from the specific asset (assetA) level by reversing that particular asset (including the accumulated depreciation) from asset register module in the system and put in the new revalued value and re-set up the depreciation?

Or it's fine to leave the gain sitting at a high level under PPE account (result of journal entry) instead of giving the asset register a twist.

[Marek Muc]

These entries are made in consolidation journal only. Your company (the acquiree) doesn't recognise this fair value adjustment in its separate accounts. BTW Ketan already explained this in viewtopic.php?t=1457

[JBHF]

Hi Marek, you are right, but in my scenario, the head office wants us to recognize the fair value from our book instead that's why we did the journal to DR the PPE at the high level. In my scenario, I don't know if I need to change the fair value of that particular asset from asset register level (ERP fixed asset module) or I just leave that high level adjustment from account basis.

[Marek Muc]

Does your new parent use any consolidation software? How do you report your results for them?

[JBHF]

Hi Marek yes they do use SAP while we use different software. Every month we sed TB to them separately..

Consolidation aside. The question is if we revalue a PPE (regardless of parent or sub), should we do it from the account level or asset register level (dispose the particular asset along with the acct department and register a new asset with new value from fixed asset module) ?

[Marek Muc]

You should look into your local accounting regulations because IFRSs don't cover bookkeeping. If your local laws don't have specific requirements, just choose the approach that works best for you.