An old vehicle has a book value of ₹90,000. It is decided to value it at ₹78,000, but it is not yet sold. What happens in revaluation at admission?

Correct answer: ₹12,000 loss debit

Revaluation is based on the revised agreed value of an asset, not on whether the asset has physically been sold. The vehicle’s book value is ₹90,000 and its value for the reconstituted firm is reduced to ₹78,000. The decrease is ₹90,000 − ₹78,000 = ₹12,000. A decrease in an asset is a loss because the firm’s net assets are reduced by that amount. Therefore Revaluation Account is debited by ₹12,000 and the vehicle account is credited by ₹12,000, bringing it to the revised value. No sale is required for this adjustment. Option D wrongly treats the full revised value as a loss, while option C ignores the agreed revaluation. Hence option A is correct.