Question

    If an entity revalues its land upward and this is the

    first time revaluation is being done, how is the increase treated under Ind AS 16?
    A Recognised in profit or loss Correct Answer Incorrect Answer
    B Recognised in OCI and accumulated under revaluation surplus Correct Answer Incorrect Answer
    C Ignored in books Correct Answer Incorrect Answer
    D Adjusted against retained earnings Correct Answer Incorrect Answer
    E Taken to capital reserve directly Correct Answer Incorrect Answer

    Solution

    Under Ind AS 16, if an asset’s carrying amount is increased due to revaluation and there is no prior loss reversal, the increase is recognised in Other Comprehensive Income (OCI) and accumulated in equity as a revaluation surplus.

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