i've an question about why we apply revaluation model to PPE,but when we measure investment property we use fair value model.
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about revaluation model and fair value model
15y ago
15y ago#1Maybe because PPE is bought and held for use in the business. Investment property is bought and held for its potential for capital growth or income generation.
So PPE is valued on a depreciated historic cost basis ( or revaluation as an allowed alternative ) where investment property is fair valued each year reflecting the purpose for which it was bought - ie an increase in value
So PPE is valued on a depreciated historic cost basis ( or revaluation as an allowed alternative ) where investment property is fair valued each year reflecting the purpose for which it was bought - ie an increase in value
15y ago#2@mikelittle said:
Maybe because PPE is bought and held for use in the business. Investment property is bought and held for its potential for capital growth or income generation.
So PPE is valued on a depreciated historic cost basis ( or revaluation as an allowed alternative ) where investment property is fair valued each year reflecting the purpose for which it was bought - ie an increase in value
I got it Thanks!!!
15y ago#3ok
15y ago#4what is fair value
14y ago#5Arm's length value? The value agreed between a willing buyer and a willing seller? Market value, where there is an active market? Take your pick
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