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Quoted Investments - Revalution - FRS 102 1A

Quoted Investments - Revalution movement?- FRS 102 1A

Hi,

I hope everyone is well :-)

I was wondering if someone could help me with a question, under FRS 102 1A what is the movement for unrealised gain/(loss) on a quoted investment?

I've had someone say "it goes straight to the P&L" and someone say "it goes to the P&L and then you move it to a reserve under the P&L in the year and call it other reserves " and someone also say " it just goes straight to reserves".

Please could someone clarify the correct way, our Technical Officer is out of the office and I'd like to finish a set of accounts correctly :-)

Thank you for you time in advance folks :-)

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20th Apr 2018 08:27

Hi Jonathan

The in-year movement goes through the P&L of the year. As the gain is unrealised it's not distributable - for this reason some companies choose to then move the gain to an 'other reserve' to keep a record of which recognised profits are and are not distributable under separate headings. There's no requirement to do this though, it's an accounting policy choice for the preparer.

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20th Apr 2018 11:13

There is, of course, the deferred tax movement to take account of (if material) in a similar manner

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20th Apr 2018 13:53

Thanks both for your reply, greatly appreciated :-)

I said P&L in the year but doubted my self and was struggling to find the relevant section.

Thank you again :-)

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By mcecazo
27th Apr 2018 01:41

Related to this issue I use VT software how I would move the unrealised gain/loss from PL to the reserve account?

Which accounts can I use in VT? and the move would affect the P/L ...?

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By daniel_
to mcecazo
27th Apr 2018 10:29

If it's absolutely necessary to have the other reserves in VT (and not just in the final accounts) you can create a new account within the profit and loss ledger called 'other reserves brought forward'.

VT will always YE-transfer the P&L items to profit and loss brought forward so you'll have to create a manual journal on the first day of the new period:
DR £XX Profit and loss account: Brought forward
CR £XX Profit and loss account: Other reserves brought forward

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By mcecazo
to daniel_
27th Apr 2018 11:16

daniel_ wrote:

If it's absolutely necessary to have the other reserves in VT (and not just in the final accounts) you can create a new account within the profit and loss ledger called 'other reserves brought forward'.

VT will always YE-transfer the P&L items to profit and loss brought forward so you'll have to create a manual journal on the first day of the new period:
DR £XX Profit and loss account: Brought forward
CR £XX Profit and loss account: Other reserves brought forward

I have done the following:

I has a revaluation reserve of 8K which I transferred to a new account "Revaluation in P/L or Fair value Gain/Loss unrealized" and cleared the reserve which under FRS 102 does not exist. Then I reduced the revaluation in P/L of 2k because this year the fair value has gone down. But then in VT software I have 2 deferred tax accounts: one charged to other comprehensive account and the other charged to profit and loss account.....which one shall I use? The deferred tax is for unrealized gain in listed shares fixed asset investment.

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27th Apr 2018 12:06

Is the unrealised gain taxable? I thought it was.

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