[Tux]

Can anyone help me understand this?

In Wiley Test Bank for FAR, MCQ FA-0134 under Fixed Assets section, (but this question is referring to intangible assets) …

This is my understanding – Only IFRS uses the revaluation model, and under the revaluation model, impairment losses go to the income statement, and reversals of impairment losses are, first, applied as gains to the income statement – UP TO the amount of the original loss. Any additional gains go to OCI.

Why is my understanding different from the answer solution?

It says that under the revaluation model, both gains AND losses go to OCI, but I learned it differently.

What am I missing???

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

feedback anyone ???

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

feedback anyone ???

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tncincy]

I would compare the difference with IFRS in the ninja notes, or go back to the chapter in Wiley. Some have suggested goggling the topic if a better understanding is needed.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Tncincy]

I would compare the difference with IFRS in the ninja notes, or go back to the chapter in Wiley. Some have suggested goggling the topic if a better understanding is needed.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Tux]

I've come across this MCQ again in my studies and can't figure out what I don't understand about it.

Thanks, tncincy, for recommending that I refer to Ninja Notes, but it did not answer my question.

I believed that I had a clear understanding of how the revaluation model for IFRS works – (i.e. when to apply a loss or gain to OCI and when to apply a loss or gain to income statement – see my original post), but this question is throwing me for a loop.

Could this be a mistake in Wiley?

I asked my Becker instructor to explain the revaluation model (without referring to this specific question) and he explained it the same as how I did in my original post above.

Can anyone provide their feedback on Wiley MCQ FA-0134 in the test bank for FAR under fixed assets?

Why does it say that the reversal of the impairment loss ($7,000) goes to OCI and NOT to Income Statement?

Thanks!!

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

I've come across this MCQ again in my studies and can't figure out what I don't understand about it.

Thanks, tncincy, for recommending that I refer to Ninja Notes, but it did not answer my question.

I believed that I had a clear understanding of how the revaluation model for IFRS works – (i.e. when to apply a loss or gain to OCI and when to apply a loss or gain to income statement – see my original post), but this question is throwing me for a loop.

Could this be a mistake in Wiley?

I asked my Becker instructor to explain the revaluation model (without referring to this specific question) and he explained it the same as how I did in my original post above.

Can anyone provide their feedback on Wiley MCQ FA-0134 in the test bank for FAR under fixed assets?

Why does it say that the reversal of the impairment loss ($7,000) goes to OCI and NOT to Income Statement?

Thanks!!

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Study Monk]

Losses usually hit the Income Statement for both IFRS and GAAP because of the rule of conservatism. Revaluation Gains hit OCI and there is no such thing as an Revaluation Loss category in OCI. Losses DO get booked to OCI when there is a revaluation gain for the same asset. The losses however get booked to OCI to the extent of the revaluation gain previously recognized and will NEVER result in a revaluation loss balance in OCI. So if you have a $55 dollar realized gain balance in your OCI for a patent in 2012 and then you discover a $100 loss on that same patent $55 of you loss will clear the OCI account and the rest will hit the IS and reduce the patent balance.

The patents value before the loss is represented in your financials like this:

2012 Patent(BS) $150 + Patent Revaluation Gain2012 (OCI) $55 = $205 (Total value of patent)

2013 Patent (BS) 150 + Patent Revaluation Gain2012 (OCI) $55 -Patent Revaluation Loss 2013 $100

=2013 Patent (BS) 105

OCI account was cleared out in 2013 and the patents value was reduced to $105 and the $45 additional loss was booked to the income statement.

I spoke to an ancient wise man who sent me on a mushroom induced journey through an ancient forest to find the key to passing the CPA exam. A talking spider monkey told me to throw the last of my drinking water in the dirt to find what I was looking for. So I followed his instructions and the following message appeared in the soil:

"Do 5000 multiple choice questions for each section"

[Study Monk]

Losses usually hit the Income Statement for both IFRS and GAAP because of the rule of conservatism. Revaluation Gains hit OCI and there is no such thing as an Revaluation Loss category in OCI. Losses DO get booked to OCI when there is a revaluation gain for the same asset. The losses however get booked to OCI to the extent of the revaluation gain previously recognized and will NEVER result in a revaluation loss balance in OCI. So if you have a $55 dollar realized gain balance in your OCI for a patent in 2012 and then you discover a $100 loss on that same patent $55 of you loss will clear the OCI account and the rest will hit the IS and reduce the patent balance.

The patents value before the loss is represented in your financials like this:

2012 Patent(BS) $150 + Patent Revaluation Gain2012 (OCI) $55 = $205 (Total value of patent)

2013 Patent (BS) 150 + Patent Revaluation Gain2012 (OCI) $55 -Patent Revaluation Loss 2013 $100

=2013 Patent (BS) 105

OCI account was cleared out in 2013 and the patents value was reduced to $105 and the $45 additional loss was booked to the income statement.

I spoke to an ancient wise man who sent me on a mushroom induced journey through an ancient forest to find the key to passing the CPA exam. A talking spider monkey told me to throw the last of my drinking water in the dirt to find what I was looking for. So I followed his instructions and the following message appeared in the soil:

"Do 5000 multiple choice questions for each section"

[Author]

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