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Hi,
I’ve watched your lectures and now I am reading the technical articles from ACCA website.“Unless the gain reverse revaluation losses on the same asset that were previously recognised in the Income statement-in this instance the gain is to be shown in the income statement”
Can you give a simple example for the statement above ? I’d really appreciate it as English is not my first language and therefore I don’t really understand
Hi,
Imagine if we have an asset (land) that has been impaired from 100 to 80, and the 20 impairment loss was recognised though profit or loss. It the asset is then subsequently revalued to 130 then the increase from 80 to 100, i.e. the 20 that was originally taken through profit or loss is firstly recognised in the same place as the original impairment, so there is 20 gain in profit or loss. The remaining increase from 100 to 130 is recognised through other comprehensive income. So there is a gain of 30 through OCI.
Hope that helps.
Thanks
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