Skip to content

ACCA Applied Knowledge · Financial Accounting · Statement of financial position

Which of the following is a movement that would be shown in the revaluation surplus rather than in profit or loss?

A gain on revaluing a property above its carrying amount, with no previous revaluation loss charged to profit or loss, is credited to other comprehensive income and held in the revaluation surplus. The other items are recognised in profit or loss.

  1. ADepreciation charged on a revalued building
  2. BA gain on revaluing a freehold property above its carrying amount, where no earlier loss on it was recognised in profit or lossCorrect
  3. CProfit on sale of a machine
  4. DImpairment of goodwill

Explanation

Under IAS 16 a revaluation gain is recognised in other comprehensive income and accumulated in the revaluation surplus, unless it reverses an earlier loss charged to profit or loss. Depreciation, disposal profit and goodwill impairment all go through profit or loss.

Did you get it right without looking?

One question tells you little. A timed set on Statement of financial position shows your real accuracy, how long you take and where you lose marks.

Practise Statement of financial positionFree diagnostic mock

More Statement of financial position questions