Revaluation model

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Financial reporting - non-current assets - IAS 16 - IAS 38.

Under the revaluation model non-current assets are carried in the reporting entity's balance sheet at their revalued amounts, being:

  • Fair value at the date of revaluation, LESS
  • Subsequent depreciation, amortisation and impairment.

Under the revaluation model, revaluations should be carried out regularly, so that the carrying amount of an asset does not differ materially from its fair value at the balance sheet date.

If an item is revalued, the entire class of assets to which that asset belongs should be revalued.

Revalued assets are depreciated or amortised in the same way as under the cost model.

If a revaluation results in an increase in value, it is usually credited to other comprehensive income.

If a revaluation results in a decrease in value, it is usually charged to the statement of profit or loss for the period.

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