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“A revaluation surplus on a financial asset classified as FVTOCI is a good example of a bridging gain. The asset is accounted for at fair value on the statement of financial position but effectively at cost in SOPL”
What is the mean of the Financial asset is at cost in SOPL?the effective rate of int income of debt instrument?is it also based on the FV of a debt instrument b/f?
It’s hard to put into words…………..
I think he means that, as all gains are reflected in OCI and never recycled to P&L, then, as far as the P&L is concerned, you might as well leave the asset at cost. Wow!
For the exam, all you need to know is:
FTVOCI – equities – gains in OCI
FTVOCI – debt – gains in OCI and later recycled to P&L
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