Remeasurement of Assets

IFRS allows a remeasurement of certain assets to fair value through a revaluation method. This increase is recorded as part of a revaluation surplus account, which bypasses the income statement and, therefore, does not affect net income. Do you think this is an appropriate method? Why should investment property increases affect net income as opposed to PP&E? Explain your position whether you agree or disagree with the accounting treatment for revaluation surplus.

Prof. Angela

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