Which statement concerning revaluations that reverse prior adjustments in value is untrue?
A) A revaluation decrease that reverses a previous increase should be recognised as a decrease in other comprehensive income to the extent of any credit balance existing in the revaluation surplus reserve account.
B) A revaluation increase that reverses a previous decrease should be recognised in the income statement to the extent that it reverses any previously downward revaluation of the same asset.
C) A debit to a revaluation surplus reserve account that is a reversal of a previous revaluation increase should not exceed the amount of the original credit.
D) When a change in valuation is a reversal of a previous revaluation accumulated depreciation does not have to be written off against the asset before the revaluation is recorded.

Question

Quizplus · Accepted Answer

When a change in valuation is a reversal of a previous revaluation, accumulated depreciation does not have to be written off against the asset before the revaluation is recorded. This statement is true, so the statement that is untrue is either A, B, or C. Option A is true, as a revaluation decrease that reverses a previous increase should be recognised as a decrease in other comprehensive income to the extent of any credit balance existing in the revaluation surplus reserve account. Option B is also true, as a revaluation increase that reverses a previous decrease should be recognised in the income statement to the extent that it reverses any previously downward revaluation of the same asset. Option C is also true, as a debit to a revaluation surplus reserve account that is a reversal of a previous revaluation increase should not exceed the amount of the original credit. Therefore, the only option that is untrue is D.

Which Statement Concerning Revaluations That Reverse Prior Adjustments in Value