What happens to the financial statements?
Assets go up and what else?
Okay, assets go up, equity goes up. Gain is reported if asset was previously revaluated otherwise revaluation bypasses income statement. Someone please correct me if Im wrong.
I thought assets do not get impacted directly by revaluation and contra account is established for any gain and losses. If you exceed the value from the previous impairment, yes you are right, gain is reported in the income statement.
Sgupta - either way Assets will increase no?
i.e. PPE = 5M Contra = 1M net = 4M
Revalue, therefore decrease contra. PPE=5 Contra = 0 Net = 5M.
I haven’t seen the contra account methedology so far, usually a direct hit on the PPE item.
Yes I agree, but make sure you remember high level view concepts from level 1 as that knowledge can be tested at any point of time, of course this is only at high level, and not at the deep down technical level as how you calculate revenue using installation method but you should know what impact accelerating and deaccelerating may have on the statements.