IAS 16Chapter 7Lesson 2
Increases and decreases in value, transfer of the revaluation surplus, tax effects
Step 1 of 8Learning objectives
Go deeper+1 deeper insight · +1 calculation · +1 journal entry · +1 point of attention
Where a revaluation difference goes: an increase goes to other comprehensive income and builds up the revaluation surplus, unless it reverses an earlier decrease recognised in profit or loss; a decrease goes to profit or loss, except to the extent of the existing revaluation surplus of the same asset; the surplus may later be transferred to retained earnings, without passing through profit or loss; tax effects fall under IAS 12.
35 minNot started
Learning objectives
- Determine the part of an increase in value recognised in other comprehensive income and in profit or loss.
- Determine the part of a decrease in value charged against the revaluation surplus and to profit or loss.
- Calculate and record the transfer of the revaluation surplus to retained earnings.
- Analyse the effect of successive revaluations on profit or loss, other comprehensive income and equity, and spot the tax effects governed by IAS 12.