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Is it correct to say that the fair value of the property when adjusted requires to see whether a fair value appraisal is required for other assets which belong to the same class. management might have forgot about this and this would result in understatement of assets as matter to be considered?
Is this the question with the non-adjusting subsequent event – a fire?
This is not a question concerning impairments or revaluations -it was a subsequent event that affected just the one asset in the class and that same event is unlikely to affect the other assets in that class
If the event were not a fire but was something else – say, an earthquake – then two issues immediately spring to mind:
– surely the group must have known that their property was located on or near an earthquake area and
– that being the case, surely there should be adequate insurance to mitigate the damaging effects of earthquakes
In terms of your proposal, therefore, I suppose that, for a one-off occurrence such as a fire, revaluation assessment of other assets in the same class is not really appropriate and, for a natural disaster event such as an earthquake, you would wish to confirm the adequacy of the insurance cover but again a revaluation assessment is not really appropriate
OK?
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