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ACCA Applied Knowledge · Business and Technology · Financial information provided by business

A company's statement of profit or loss for the year includes revenue, cost of sales, distribution costs, administrative expenses and finance costs. Which of the following items would be reported in other comprehensive income rather than in profit or loss?

A revaluation gain on freehold land under the revaluation model is reported in other comprehensive income and credited to revaluation surplus. Depreciation, loan interest and disposal losses are ordinary expenses that are recognised in profit or loss.

  1. ADepreciation of office equipment
  2. BInterest paid on a bank loan
  3. CA revaluation gain on freehold land held under the revaluation modelCorrect
  4. DLoss on disposal of a delivery van

Explanation

Revaluation gains on property, plant and equipment under the revaluation model are recognised in other comprehensive income and accumulated in a revaluation surplus. Depreciation, loan interest and loss on disposal are all expenses recognised in profit or loss.

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