When an entity adopts the valuation model to account for its property,plant and equipment,which of the following statement(s)is/are correct?
A) If an item is revalued, all assets in the same class shall be revalued.
B) If an asset's carrying amount is decreased as a result of a revaluation, the decrease is always recognised in profit and loss.
C) If an asset's carrying amount is increased as a result of a revaluation, the increase is always credited directly to equity.
D) All of the given answers.
E) None of the given answers

Question

Quizplus · Accepted Answer

According to the valuation model, if any asset in a class is revalued, all assets in that class must also be revalued to ensure consistency in the valuation.

Option B and C are incorrect because the treatment of the increase or decrease in carrying amount depends on whether it offsets a previously recognised revaluation decrease or not. If it does, the increase is recognised in profit and loss, and if it does not, it is credited directly to equity.

Options D and E are incorrect because only option A is true.

When an Entity Adopts the Valuation Model to Account for Its