Hello Stephen,
Ive a question regarding ias 36. I have watched the FR and SBR lectures and still not sure on the treatment. i would appreciate your answer on how to treat year 2 and year 3 on the question below (2 questions).
An asset is carried under the revaluation model. Ignoring depreciation, and please assume the ceiling is not a constrain.
Year 1 — Carrying amount 100. Recoverable amount 80.
Impairment 20. No revaluation surplus exists for this asset, so all 20 is charged to P&L.
Carrying amount = 80.
Year 2 — Fair value rises to 130. Increase of 50.
Question 1: Is the 50 credited 20 to P&L then 30 to OCI, or 50 to OCI?
Year 3 — Recoverable amount falls to 50. Impairment of 80.
Question 2 : Assuming the answer to Q1 leaves 30 in the revaluation surplus, is the 80 charged 30 to OCI then 50 to P&L, or does some other order apply given the asset was originally impaired through P&L?
Could you please confirm the correct order and the reasoning pls?
Thank you.