Revaluation increases

Learning objectives

• Determine the portion of a revaluation increase recognised in profit or loss and in OCI.L2, L3
• Record a revaluation increase, including the reversal of a previous decrease.L3
• Analyse the cumulative effect of several successive revaluations on profit or loss, OCI and equity.L4

Normative references

• IAS 16 §39Increase in value in OCI, accumulated in the revaluation surplus, except to the extent that it reverses a decrease of the same asset previously recognised in profit or loss.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• An entity applies the revaluation model to its land. A plot acquired for 300,000 was revalued to 270,000 in 20X1; the 30,000 decrease was recognised in profit or loss because there was no revaluation surplus. In 20X3, its fair value reaches 320,000. How is the 50,000 increase recognised in 20X3?L4