While No General Principle Describes the Nature of Items Excluded

Multiple Choice

While no general principle describes the nature of items excluded from net income and included in Other Comprehensive Income, they tend to arise from remeasurements of assets and liabilities (often, remeasurements at fair value) and not from transactions.For example, IFRS permits but does not require firms to revalue certain noncurrent assets upward to reflect increases in fair value in excess of acquisition cost.Under IFRS, such a revaluation remeasurement increases assets (because the firm now records an existing asset on the balance sheet at a larger number) and increases Other Comprehensive Income.These increases are accumulated in a(n) _____ account, Revaluation Surplus.

A) liability
B) shareholders' equity
C) revenue
D) asset
E) expense