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IAS-40 vs IAS-16

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › IAS-40 vs IAS-16

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  • April 20, 2022 at 1:53 pm #654071
    maximus07
    Participant
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    • ☆☆☆☆

    In IAS-40 Fair Value model, we revalue asset and show as profit or loss in SOPL.
    In IAS-16 Revaluation model, we revalue asset and show as revaluation gain or loss in Other comprehensive income.

    Can you please tell why? Book only states but don’t tells why.

    April 22, 2022 at 11:32 am #654279
    P2-D2
    Keymaster
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    • ☆☆☆☆☆

    It is again due to the usage of the asset. If we have a gain on an investment in equity/debt then the gain goes through profit or loss, hence the same treatment is adopted if we have property that is held for investment purposes.

    Thanks

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