Outline the two situations where an asset revaluation surplus may be transferred to retained earnings.

Question

Quizplus · Accepted Answer

The Answer is The first situation is where the associated non-current asset is derecognised (that is,removed from the statement of financial position).In this case the whole or part of the surplus may be transferred.The second situation is where an asset is being used up over its useful life,a proportion of the revaluation surplus,in relation to the depreciation on the asset,may be transferred to retained earnings.

Outline the Two Situations Where an Asset Revaluation Surplus May