Page 8 - L N (change in psr)
P. 8
c. Fall in Value is More than Investments Fluctuation Reserve: In this case,
amount of Investments Fluctuation Reserve along with balance amount of
fall in value is transferred to Investment Account and the amount in excess
of reserve is debited to the Revaluation Account for which following entries
are passed:
Investment Fluctuation Reserve A/c …Dr.
Revaluation A/c …Dr.
To Investment A/c
Partners’ Capital (or Current) A/cs …Dr. *In Old Ratio+
To Revaluation A/c
iii. When there is an Increase in Market Value of Investment: In this case,
total amount of Investment Fluctuation Reserve is distributed among
partners and increase in value of investment is credited to Revaluation
Account for which following entry is to be passed:
Investment Fluctuation Reserve A/c …Dr.
To Partners’ Capital (or Current) A/cs *In Old Ratio+
Investment A/c …Dr.
To Revaluation A/c [Investment Brought up to Market Value]
Revaluation A/c …Dr.
To Partners’ Capital (or Current) A/cs *In Old Ratio+
