Revaluations Increments Are Often a Source of Discussion Because

question 31

Multiple Choice

Revaluations increments are often a source of discussion because:

• A) Historical-cost accounting has traditionally stated that unrealised holding gains should generally be treated as income.
• B) A transaction with an external party is always required to recognise income.
• C) Revaluation increments can be used to offset previous decrements across all asset classes.
• D) This model loosens debt covenant restrictions.

---

Definitions:

Social Identity Theory

Social identity theory is a psychological framework that posits individuals derive part of their identity and self-esteem from the groups to which they belong.

Status Quo

The existing state or condition of a situation, which is often seen as the standard or norm.

Entitativity

The perception or degree to which a group is seen as being a coherent, distinct, and unified entity.

Ingroup Bias

The inclination to prefer individuals from one's own group rather than from other groups.