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DearMike
When an asset is revalued, the relevant Asset account is debited to increase the value and revaluation reserve is credited.
How does ‘othe comprehensive income’ (OCI) comes in?
What is ‘OCE’. Are ‘OCI and OCE inter changeable?Thank you in advance.
Hi bhoornima,
For me, I assumed it is Dr Asset a/c
Cr Revaluation Reserve a/c (it is found in both the OCE & OCI)
OCE = other components of equity, which is found in the SOFP
OCI = other comprehensive income, in SOCI, right after profit for the year.
Hope that helps.
(Please correct me if wrong)Thank you for clarifying. I was not aware OCI and OCE are both available inboth Por L ( SOCI) and Reserves (.in the equity section)
The following sentence in a text book (Wliley IFRS practical imlementation Guide and workbook) made this matter rather vague.to me (page 401.)
‘A revaluation increase is to be recognised in other comprehensive income and accumulated in equity unless it reverses a previously recognised impairment loss in which case it can be recognised in profit and loss’.My doubt was ‘the increase is to be recognised in OCI and accumulate in equity’. How could an item in Por L can be treated as a reserve even if it is considered ‘unrealised’.
Bhoornima
Yes, OCI = P & L, just after the profit for the year, and
OCE = Balance Sheet in Equity section.So, when you Cr the Revaluation Reserve, (both takes the increase).
All the best.
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