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Hello dear sir
I have read this sentence in an article of acca f3 about the concept of statements of profit/loss.
gains on the revaluation of land and buildings accounted for in accordance with IAS 40, Investment Properties, are recognised in P/L and are part of the Retained Earnings (RE).Really don’t know what does it mean because as I know the format of statements of p/l we don’t record the retained earnings and gains or losses on revaluation so why they said like this?
And please can you tell me that what items we record in statements of OCI ? And what does it by RECYCLING (THE RECLASSIFICATION FROM EQUITY TO P&L)
The Statement of Profit or Loss and other Comprehensive Income is exactly the same as the Statement of Profit or loss except that at the end we show also gains on revaluation.
However, only the normal profit gets added to retained earnings. Gains on revaluation do not go to retained earnings but go to a Revaluation Reserve.
Ok thank u sir and what does it mean by reclassification from equity to p/l do u have any lectures on it if no so please tell me the meaning of this process.
“Recycling” is not a standard term and so what it means depends on the context in which you read the statement.
The lectures as a whole are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Would I be right in saying that gains / losses on revaluation are the only item of other comprehensive income addressed in F3? I am aware that there are a number of other different sources of OCI e.g. hedges, foreign exchange translations etc.
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