Where there is an asset revaluation decrement that does not reverse a previous increment,the amount is debited to:
A) expense
B) retained profits
C) revaluation surplus
D) capital.

Question

Quizplus · Accepted Answer

A decrease in the value of an asset that does not reverse a previous increase indicates the asset is permanently impaired or depreciated. Therefore, the amount of the decrement should not be allocated to the revaluation surplus account, which represents the unrealized appreciation of the asset, but should be recognized as an expense in the income statement to reflect the decline in the asset's value in accordance with the matching principle of accounting.

Where There Is an Asset Revaluation Decrement That Does Not