Question 31 in Kaplan FR kit (2020-2021) ,(I could not copy the question)
The question is requiring some adjustment to retained earnings .
Why They included the revaluation of investment property as an adjustment in retained earnings,
I think here because it is an investment property.
Sir, please correct me if I am wrong .As per my understanding the revaluation should come as a separate line in equity as other components in equity right ? not within retained earnings.
No, when we revalue an IP at the reporting date the gains/losses go through profit or loss, hence the adjustment through retained earnings. They do not go through other comprehensive income.