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If the asset account Land increased, what's the likely effect on Cash?

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Question added by Michael Lagunday , Accounts Assistant , Invest Group Overseas LLC
Date Posted: 2015/08/17
Rahul Saxena
by Rahul Saxena , Deputy Manager , Aircel Ltd

if cash is used to purchase land then reduce cash(asset) and increase land (asset), if the land is increased due to revaluation then increase equity by the revaluation reserve amount (i.e. new value of land - carrying value of land) as per IFRS.

Badar Khan
by Badar Khan , Accounts cum administrative assistant , Al Qassimia Drivng Training Centre.Sharjah

if land is purchased through cash then cash will decrease in other words it will be credited

Hossam Mohamed
by Hossam Mohamed , Senior Accountant , Allied Arab Assurance Brokerage

If the reason for this increase is due to the purchase of new land and pay for it, so cash account will be decreased.

Syed  Muntazir
by Syed Muntazir , Accountant , AL BARAKAH DATES FACTORY LLC

It will not effect the cassh account. Because revaluation of land doesnt effect cashh at all. THe entry for revaluation is:

Land A/C                                 Dr

Revaluation surplus a/c       Cr

 

 

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