Page 121 - F3 -FA Integrated Workbook STUDENT 2018-19

Non-current assets: disposal and revaluation

Revaluation of non-current assets

2.1 Revaluation

IAS 16 permits items of property, plant and equipment to be measured and
accounted for using the revaluation model. A corporate entity (rather than a sole
trader or partnership) may choose to reflect the fair value of items of property, plant
and equipment in its statement of financial position, usually land and buildings. 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).

115