[Question] Fair Value Adjustment

[JPWilliams007]

Hi,

I do know how to process the journal for when property is sold:
Cr - Fixed Asset
Dr - Accumulated Depreciation
Dr - Cash

How does one the clear the fair asset value adjustment, as it has increased due to the property.

Thanks,

[Andromeda]

Your entries should be
Cr. Cost
Dr. Accumulated Depreciation
Dr. Impairment / Fair Value (I assume it is a credit?)
Dr. / Cr. Profit or Loss on disposal with the net of the above, this represents the net carrying value.
Dr. Cash
Cr. Profit or Loss on disposal

[JPWilliams007]

Hi Andromeda,

Thanks for the replay however Fair Value is a debit. Kindly see below.

[Andromeda]

Ah ok.

Your entries would be
Cr. Cost
Dr. Accumulated Depreciation
Cr. Fair Value
Dr. / Cr. Profit or Loss on disposal with the net of the above, this represents the net carrying value.
Dr. Cash
Cr. Profit or Loss on disposal

Now you need to get rid of the NDR, so credit the NDR and debit Retained Income.

[JPWilliams007]

Hi Andromeda,

NDR would be my net disposable revenue?