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      Question

      An asset was previously revalued downward. If it is now

      revalued upward, how should the increase be treated?
      A Ignore upward valuation Correct Answer Incorrect Answer
      B Adjust retained earnings Correct Answer Incorrect Answer
      C Recognised in OCI to the extent of previous decrease Correct Answer Incorrect Answer
      D Recognised in P&L to the extent of previous decrease Correct Answer Incorrect Answer
      E Transferred to capital reserve Correct Answer Incorrect Answer

      Solution

      Revaluation increase is recognised in P&L to the extent it reverses a previous decrease that was earlier recognised in P&L (Ind AS 16 para 40).

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