Under the revaluation model of IAS 16, where is a normal upward revaluation of property, plant and equipment generally recognized?
Correct answer: B. As a revaluation surplus in other comprehensive income
- A. As revenue in the income statement
- B. As a revaluation surplus in other comprehensive income
- C. As an increase in share capital
- D. As a liability in the statement of financial position
Explanation
A normal upward revaluation is recognized in other comprehensive income and accumulated in equity as a revaluation surplus. It is not ordinary revenue, share capital, or a liability, although a reversal of a previous decrease may have a different treatment.
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About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
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