How to record DTL for revaluation surplus
Recording the deferred tax liability associated with the upward revaluation of fixed assets under IFRS, where the gain is recognized in Other Comprehensive Income.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| OCI - Revaluation Surplus | Equity | 25,000.00 | - |
| Deferred Tax Liability | Liability | - | 25,000.00 |
💡 Accountant's Note
When an asset is revalued upwards under IFRS, the carrying amount increases for book purposes but the tax base usually remains at historical cost. The tax effect of this difference is charged directly to OCI rather than the income statement.
Practitioner & Systems Framework
💻 ERP Architecture
Manual journal entry often required at year-end unless the fixed asset module supports IFRS revaluation tax logic.
⚠️ Audit Flags
Significant increases in asset values without corresponding tax base adjustments.
📄 Required Documentation
Appraisal reports and deferred tax calculation based on the local corporate tax rate.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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