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Chapter 7
Revaluation of non-current assets
2.1 Revaluation
According to IAS 16, items of property, plant and equipment can be measured and
accounted for using the revaluation model. Some non-current assets, such as land
and buildings may rise in value over time. A corporate entity (rather than a sole trader
or partnership) may choose to reflect the value of the asset in its statement of
financial position. This is known as revaluing the asset.
IAS 16 says that 'If an asset’s carrying amount is increased as a result of a
revaluation, the increase shall be recognised in other comprehensive income
and accumulated in equity under the heading of revaluation surplus' (IAS 16,
para 39).
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