Under AASB 116 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

Under AASB 116, when an asset is revalued using the net method, accumulated depreciation should 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, and any excess will be credited to equity as a revaluation surplus. There is no requirement to write back accumulated depreciation to profit, close it off to the equity account or increase it by the same proportion as the gross carrying amount.

Under AASB 116 When an Asset Is Revalued and the Net