Cost model (IAS 16)

There’s no such verb as “to revaluate” so, for the benefit of you, me and any others that read this thread, I’m going to replicate it here, and then answer it

“I would like to ask a question related to revaluation models mentioned in IAS 16.
– If a company decides to use “cost model” to value an asset why does the company have to disclose the fair value of it anyway? Since they can’t choose (haven’t chosen?) to value it by (using the) fair value model, therefore no reliable figures represent the fair value of the asset.”

I think that that is what you mean but now I have issues with it!

1) “… why does the company have to disclose the fair value of it anyway?”

There’s nothing mandatory about HAVING to disclose the fair value

This is a recommendation, not a requirement

2) The option of valuing assets by cost model is literally that … it’s an option that is selected by the company

You give the impression that you think that cost model is chosen because there is no reliable information about fair values.

This is not correct – there could very well be perfectly adequate information about fair values

If a company chooses to value under the cost model it’s because the company … chooses to value under the cost model and has nothing to do with the availability or non-availability of fair values

OK?

There’s no need to apologise for your English!

You should hear my attempts at Finnish!

Glad to have helped 🙂