A depreciable property costing P1,400,000 with original residual value of P80,000 after 10 years, had been revalued at a replacement cost of P1,680,000 with residual value of P20,000. The age of the asset is four years when it was revalued. What is the revaluation surplus?  Please answer it complete using good accounting form. Thank you

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Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.