- 4 Marks
FR – May 2018 – L2 – Q5c – Financial Reporting Standards and Their Applications
Identify two differences between the cost model and revaluation model for Property, Plant, and Equipment.
Question
Once an entity has recognized an item of Property, Plant, and Equipment as an asset in its books, the entity can choose between two models (or methods) to account for the asset in subsequent measurement periods, that is, the period(s) after the asset has been acquired and before its disposition. The two models are the cost model and the revaluation model. The entity shall apply the same model to the entire class of property, plant, and equipment to which that asset is of similar nature and use in the entity’s operations.
Required:
Identify TWO differences between the cost and revaluation model for the measurement of Property, Plant, and Equipment. (4 marks)
Find Related Questions by Tags, levels, etc.
- Tags: and Equipment, Cost Model, IAS 16, Plant, Property, Revaluation Model
- Level: Level 2
- Topic: Financial Reporting Standards and Their Applications
- Series: MAY 2018
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