Under IFRS, all long lived assets (tangible/intangible & definite/indefinite life*) can be revalued upwards to fair value - and this value can bypass the previously recorded loss or the original cost. The adjustments would be:
1) The new carrying value of the asset up to its original cost would be recorded in PP&E
2) A gain up to the previously recorded loss would be recorded in I/S
3) Any value over the gain or the original cost would be directly recorded in Shareholder's Equity under 'Other Comprehensive Income'
*Note that intangible/indefinite life includes goodwill.
QUESTION: What B/S entry is made on the Asset side of the equation to balance the value entered under 'Other Comprehensive Income'?
References if you are using Schweser:
1) Schweser FRA, Pg. 48, "Revaluation to Fair Value", 3rd paragraph 3
2) Schweser FRA, pg. 24-25, 'Inventory Write Up Example' |