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Hello,
I have a question regarding classification of gains.
A gain on PPE is taken to OCI whereas a gain on IP is taken to profit or loss.
I would like to know the reason for such classification.
Or is it just because of the rules of the standards?
A detail information regarding this topic would be helpful since I would be able to better understand the concept behind such classification.
Thank you.
Hi,
It is because if we invested our money in shares as opposed to property then the gain/loss would be taken through profit or loss. If we decided as an alternative to invest our money in property then for comparability purposes we should also record any gain/loss through profit or loss.
Thanks
Thank you so so much.
Your explanation made it so much clear.This part was very confusing for me. If a concept is not clear, I am afraid that I’ll make mistakes. So it was important for me to understand this concept, also for future application.
I searched for this but didn’t know that the classification is done just like the classification done for shares. It makes so much sense now.
Thank you Sir.
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