CIMA BA3 · Chapter 10 · Question 6 of 10
A company revalues its land, which cost $200,000, to $340,000. What is the double entry to record the revaluation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Debit Land $140,000, Credit Revaluation surplus $140,000
Explanation
The land is increased from $200,000 to $340,000, a gain of $140,000. Under IAS 16 a revaluation gain is recognised in other comprehensive income and accumulated in the revaluation surplus within equity, not in profit or loss.
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