How are revaluation surplus’s or losses recorded under IFRS?
Under IFRS, a revaluation surplus (gain) is recorded to other comprehensive income (OCI), while a revaluation loss is recorded to the income statement.
However, if the company reported a revaluation loss in a prior period, the company can recognize a revaluation surplus in the income statement up to the prior loss amount.
For example, if the company had a revaluation gain of $5,000 in the current year, but in the prior year they recorded $2,000 of revaluation loss to the income statement, then in the current year, $3,000 would go to OCI and $2,000 of the gain would be recorded to the income statement.
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What is other comprehensive income (OCI)?
Other comprehensive income (“OCI”) is part of stockholders equity on the balance sheet and is not part of the income statement. OCI represents the current year activity that is used to calculated accumulated other comprehensive income (“AOCI”) at the end of the year. Either gains or losses are recorded to OCI. These gains or losses […]