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The 15 year leasehold property was acquired on 1 April 2007 at cost $30 mln. The company policy is to revalue the property at market value at each year end. The valuation in the trial balance of $25.2 mln. as at 31 March 2008 led to an impairment charge of $2.8 mln. which was reported in the statement of profit or loss and other comprehensive income of the previous year (year ended 31 March 2008). At 31 March 2009 the property was valued at $24.9 mln.
In answer 1.5 mln rev. gain as at 31 March 2009 go to CoS.
Why doesn’t it go to other comprehensive income and SOCIE as revaluation reserve?Thanks!
Because its the reversal of a previous impairment. We impaired by 2.8 in 2008. In 2009 we want to reverse that impairment.
Where did the impairment go? Presumably (I assume the question told you) it went through cost of sales
So where does the reversal go? Through cost of sales!
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