In: Accounting
Note: The answer can be done in dot point form. Unrealised gains refer to the increase in value of the assets that are yet to be sold.
a) | ||
Treatment of Unrealised Gain | ||
Impairment Standard AASB 136 : | Impairment standard does not talk about enhancement in assets value. It focus on reduction as impaired loss when value got decreased based on recoverable value. So no effect for unrealised gain. | |
The Revaluation Standard AASB 116 : | The effect of unrealised gain shall be that assets and revaluation account shall be increased by the amount of gain | |
Inventory Stadard AASB 102: | Inventory valued at lower of Cost or Net realisable value. That's why enhancement in value of inventory does not need to gove any effect. | |
b) Accounting framework is based on the accounting concept and the same is consistently apply. But with respect | ||
of some optional method is provided under accounting standard, in case accounting policy in respect of changed, | ||
then proper disclosure for that changed, it's need and associated explanation shall be provided. | ||