What entries should be made in the following situatuation according to the second option (accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset)?
For example, gross carrying value of the asset is $1,000, accumulated depreciation immediately before revaluation is $500, fair value of the asset is $400.
Is it right to treat it in this way?
Dr Acc depreciation - $500
Cr Revaluation surplus - $500
Dr Revaluation surplus - $600
Cr Gross carrying value - $600
So, gross carrying value is $400 after revaluation and acc depreciation is nil.