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Hello,
I watched all PPE lectures and did BPP revision kit tasks, but got this one question wrong.
“-Which of the following statements is correct regarding investment properties?
Correct answer: An entity should treat any difference at the transfer date from a capitalized property (treated under IAS 16) to an investment property as a expense to the profit loss.”Isn’t it so that all revaluations for PPE go through OCI and not PL?
Hi,
The property would be treated under IAS 16 prior to being transferred, so if it was held under the revaluation model then the gain would go through OCI. If it wasn’t then there is unlikely to be an increase in value as that is why it would be held at historic cost, therefore there would only be a reduction in value that would go through profit or loss.
Thanks
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