ACCA Applied Knowledge · Financial Accounting · The main elements of financial statements
Which of the following items would be reported in other comprehensive income for a company that uses the revaluation model for its property?
A revaluation surplus on property, where no previous revaluation loss was charged to profit or loss, is shown in other comprehensive income. Depreciation, loan interest and profits on inventory sales are all recognised in profit or loss rather than OCI.
- AA revaluation surplus arising on property that was not previously revalued downwardsCorrect
- BDepreciation charged on the revalued property
- CInterest paid on a loan used to buy the property
- DProfit on sale of inventory
Explanation
A revaluation gain on property, where no earlier loss was recognised in profit or loss, is recognised in other comprehensive income and held in the revaluation surplus. Depreciation, interest and inventory profit all go through profit or loss.
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