Under IAS 16 when an asset is revalued and the net method is used,accumulated depreciation:
A)must be written back to profit.
B)must be closed off to the equity account.
C)should be eliminated against the gross carrying amount of the asset before revaluation.
D)should be increased by the same proportion as the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals the revalued amount.

Question

Quizplus · Accepted Answer

When an asset is revalued and the net method is used, IAS 16 requires that the accumulated depreciation must be eliminated against the gross carrying amount of the asset before revaluation. This means that the carrying amount of the asset after revaluation will be equal to the revalued amount, adjusted for any accumulated depreciation before the revaluation. This ensures that the carrying amount of the asset reflects its fair value at the time of the revaluation.

Under IAS 16 When an Asset Is Revalued and the Net