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Hi Sir, just looking at example 1& 2 in chapter 5, im a little confused on why in the first example the full 27000 gain put into OCI, whereas in the second example only 3850 was impaired against the gain in OCI, using the method from the first example would there not be a gain of 4400 sat in OCI which would be impaired? thankyou
Hi,
When impairing the previously revalued asset, the amount that goes through OCI is only the amount that brings the asset to the value it would have been if we had not previously revalued it. Any excess reduction in value will go through profit or loss.
So the 3,850 reduces the asset to where it would have been and the extra 550 (4400 – 3850) goes through profit or loss.
Thanks
hi Sir, Sorry still slightly confused, so what about when there is a gain on revaluation, would that gain go into OCI as well as Equity? or just in OCI?
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