In IFRS: Example: PP&E - $200 to $300 - will be taken as equity but if previously $150 to $200 - 50 taken as gain and 50 equity PP&E - $300 to $200 - will be taken as loss but if previously $200 to $300 - still loss? Can someone please verify
I’m having a hard time following what you are saying, but this is how I understand it: IFRS, you want to write from $200 to $300 If there has never been a write down, $100 goes through equity. If there has been been a previous write down from $250 to $200, $50 goes through the income statement as a gain (same amount that was previously written off) and the remainder goes through equity. Can someone confirm?
hkalara32 IAS 16 Paragraph 39: the increase shall be credited directly to equity under the heading of revaluation surplus. Paragraph 40: the decrease shall be recognized in profit or loss. However, the decrease shall be debited directly to equity under the heading of revaluation surplus to the extent of any credit balance existing in the revaluation surplus in respect of that asset. so for your example PP&E - $200 to $300 - will be taken as equity under revaluation surplus but if previously $250 (I assume you mean 250 not 150 as you originally wrote) to $200 - 50 taken as gain and 50 equity PP&E - $300 to $200 - will be taken as loss but if previously $200 to $300 -> 100 directly to equity to reverse earlier revaluation credit. NB: I ignore the effect of tax here for the sake of simplicity
Good job guys.