Page 104 - IC26 LIFE INSURANCE FINANCE

Fair market value is the price that would be agreed to in an open and unrestricted market between

knowledgeable and willing parties dealing at arm’s length distance.

Subsequent expenditures related to an item of fixed asset should be added to its book value only if they

increase the future benefits from the existing asset beyond its previously assessed standard of performance.

 Material items retired from active use and held for disposal should be stated at the lower of their

net book value and net realizable value and shown separately.

 Fixed assets should be eliminated from the financial statements on disposal or when no further

benefit is expected from its use and disposal.

 Profit/loss on such disposal or writing off is recognized in the profit and loss account.

REVALUATION

 When the fixed assets are revalued, these assets are shown at revalued price. Revaluation of fixed

assets should be restricted to the net recoverable amount of fixed asset.

 When a fixed asset is revalued, an entire class of assets should be revalued or selection of assets for

revaluation should be made on a systematic basis. That basis must be disclosed.

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