Revaluations Increments Are Often a Source of Discussion Because

question 41

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) Holding gains are allowed to be recognised just like any other type of profit.
• D) Revaluation increments can be used to offset previous decrements across all asset classes.
• E) This model loosens debt covenant restrictions.

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Definitions:

Partner

An individual or entity involved in a business enterprise with one or more other partners, sharing in the profits and losses of the business.

Agency Parties

Individuals or entities that enter into an agency relationship where one party (the agent) agrees to act on behalf of another party (the principal).

Beneficiary

An individual or entity entitled to receive benefits or proceeds from an insurance policy, trust, or will.

Third Party

An individual or group besides the two involved in a transaction or legal case.