Why revaluation does not takes place at the time of dissolution as they have to sell the assets at the price which is profitable?
Dear Student
Revaluation account is prepared generally to revalue the assets and liabilities for showing them at the revalued figures in the balance sheet , But in case of dissolution, we know that, Assets are disposed and liabilities are settled at any agreed price (not the revalued price) i.e in case of dissolution every account is closed and their is no balance sheet after dissolution,
therefore on dissolution revaluation of assets and liabilities is not done instead Realisation account is prepared, which accounts for the book value and the value at which the asset or liability is disposed off.
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Revaluation account is prepared generally to revalue the assets and liabilities for showing them at the revalued figures in the balance sheet , But in case of dissolution, we know that, Assets are disposed and liabilities are settled at any agreed price (not the revalued price) i.e in case of dissolution every account is closed and their is no balance sheet after dissolution,
therefore on dissolution revaluation of assets and liabilities is not done instead Realisation account is prepared, which accounts for the book value and the value at which the asset or liability is disposed off.
Hope this helps
Please get back to us for any query
Keep posting
Regards