Under AASB 116 when an asset is revalued and the gross method is used,accumulated depreciation:
A) must be written back to profit.
B) must be closed off to reduce the asset account.
C) is ignored during revaluation as it has not effect on carrying amount.
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

According to AASB 116, when an asset is revalued and the gross method is used, the accumulated depreciation 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. This is to ensure that the carrying amount of the asset reflects its fair value after revaluation. Therefore, Option D is the correct choice.

Under AASB 116 When an Asset Is Revalued and the Gross