Lesson: Revaluation Surplus

In this lesson, Nick Palazzolo, CPA, delves into the intricacies of revaluation surplus, detailing the process and treatment of gains when tangible and fixed assets are revalued. He clearly defines revaluation surplus as an equity account used to store upward changes in the value of capital assets, and outlines the accounting treatment from the initial revaluation, through the credit to revaluation surplus, to the eventual transfer to retained earnings upon disposal of the asset. Nick ensures that the concept is approachable by walking through journal entries and reinforcing the importance of understanding the relationships between assets, liabilities, and equity to build a solid financial foundation.