标题: Asset revaluation effect on earnings [打印本页] 作者: JonnyKay 时间: 2011-7-11 19:17 标题: Asset revaluation effect on earnings
Am I correct with this statement:
If an asset revaluation occurs due to an asset impairment (fair value < carrying amount) then the decrease in asset value is recorded in the income statement as a loss. If this same asset's fair value increases, the increase is recognized in the income statement until the decrease in value, i.e., the loss initially recorded, is eliminated.
If this same asset's fair value increases the carrying amount, the increase in value goes into other comprehensive income as well as in the B/S under equity with the heading "revaluation surplus". If this asset's value starts to decrease, the revaluation surplus is decreased and other comprehensive income is decreased by the same amount until your back at zero. If it continues to decrease you go back to the top and put a loss in the income statement.
Yes?作者: sameeragarwal 时间: 2011-7-11 19:17
Also, do both increases in asset carrying amounts as well as decreases in asset carrying amounts decrease profitability ratios like ROA, ROE?
And one more question: If I decrease the carrying amount of a depreciable long-lived asset, do I also get to decrease the depreciation expense for the asset for the year? I know increases in carrying amount increase depreciation expense, so I assume the same logic holds for the reverse.
