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Commercial Pilot Licence (CPAER) – Canada · Question

A Canadian company using IFRS has an asset that is revalued upwards. The revaluation surplus is recognized in which part of the financial statements?

Under IAS 16, Property, Plant and Equipment, revaluation increases are recognized in other comprehensive income (OCI) and accumulated in equity under the headin

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Question: A Canadian company using IFRS has an asset that is revalued upwards. The revaluation surplus is recognized in which part of the financial statements?

Answer options:

  • Profit or loss. ✅ Other comprehensive income (OCI).
  • Retained earnings.
  • Statement of cash flows.

Correct answer: Other comprehensive income (OCI).

Explanation: Under IAS 16, Property, Plant and Equipment, revaluation increases are recognized in other comprehensive income (OCI) and accumulated in equity under the heading of revaluation surplus, unless it reverses a previous revaluation decrease recognized in profit or loss.

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