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A company that has elected to use the revaluation measurement base for its property in accordance with the requirements of AASB 116 "Property, Plant and Equipment" recognises any revaluation increases in "other comprehensive income". In contrast, a superannuation entity complying with AASB 1056 is required to recognise revaluation increases on its property in the income statement.
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Question 1: Explain why there are difference in the two approaches.
Question 2: Do you believe it is rational to have these differences in the two reporting entities?
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