Revaluation Surplus

amount, someone, previous, directly

I am confused about how much amount is reflected in the income statement as a loss/gain and how much is transferred as a surplus to the equity section when revaluing an asset...

for e.g. If we need to value the asset upwards does the gain show as a surplus or does it get reflected directly in the income statement. And subsequently when the surplus is reversed does the loss show in the income statement until the previous surplus is reversed?

Can someone clarify this giving explanation for scenarios when we value the asset upwards and then down and also vice versa...how it affects the income statement and equity..

JoeyDVivre

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发表于 2011-7-13 16:42 | 只看该作者

There is a trick though. In Scenario 2 at the end of Year 2011

I/S is increased by 4k
Equity is increased by 6k (4k from Income statement filtering into retained earnings and 2k from valuation surplus)

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JPSem

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发表于 2011-7-13 16:42 | 只看该作者

trogulj Wrote:
-------------------------------------------------------
> There is a trick though. In Scenario 2 at the end
> of Year 2011
>
> I/S is increased by 4k
> Equity is increased by 6k (4k from Income
> statement filtering into retained earnings and 2k
> from valuation surplus)

I got tricked on a question of that type... The question, in my opinion, wasn't worded properly. It took me 5 minutes just to understand what was going on (I totally understand Revaluation Surplus, and the affects on I/S and Equity), and managed to get the question wrong.

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manasib