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Basic Question 13 of 15
Under IFRS, if a revaluation initially increases an asset's carrying value by $5,000, and in a subsequent period the asset's carrying value is decreased by $2,000, ______
B. the $5,000 increase goes directly to equity and the $2,000 decrease is recognized as a loss.
C. both $5,000 and $2,000 go to equity directly.
A. the $5,000 is recognized as a profit and the $2,000 is recognized as a loss.
B. the $5,000 increase goes directly to equity and the $2,000 decrease is recognized as a loss.
C. both $5,000 and $2,000 go to equity directly.
User Contributed Comments 5
| User | Comment |
|---|---|
| cong | There is an equity account called Revaluation Surplus account. |
| poomie83 | what would be the case if the $5k was a decrease? would it still go to equity? |
| poomie83 | Never mind. the next question answered my question. decrement goes to P&L |
| johntan1979 | If initially decrease, it is immediately recognized as a loss. Later increases is recognized as profit up to the amount of the decrease. |
| farhan92 | i got the concepts flipped turned upside down... |
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Learning Outcome Statements
explain and evaluate how impairment and derecognition of property, plant, and equipment and intangible assets affect the financial statements and ratios
CFA® 2025 Level I Curriculum, Volume 2, Module 7.