Veronica Corp. uses the revaluation model for intangible assets.  On March 1, 2010, Veronica acquired intangible assets with an indefinite life for $200,000.  On December 31, 2010, it was determined that the recoverable amount for these intangible assets was $180,000.  On December 31, 2011, it was determined that the intangible assets had a recoverable amount of $187,000.  How should Veronica recognize the gain or loss in the December 31, 2011 financial statements?

A: Gain on the income statement of $7,000.
B: Loss on the income statement of $20,000.
C: Unrealized gain in other comprehensive income of $7,000.
D: Unrealized loss in other comprehensive income of $20,000.

Answer is C.

In Wiley, the revaluation gain / loss is both recognized in other comprehensive income. Thus, the answer is C.

In Becker, the revaluation loss is recognized in the income statement, unless there is a revaluation surplus in the other comprehensive income. The revaluation gain is recognized in the other comprehensive income, unless it covers the previously recognized loss in the income statement. If this concept is applied to this question, the answer will be A.

I'm confused which concept I should follow. Are there any thoughts about this question?

I think that the loss should be recognized immediately by the rule of conservatism. Becker's method looks to be more reasonable.

Let's see if anybody will help us.