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Dear Tutor,
Following an increase in the value of the PPE, as per revaluation model, the entity now decides to switch back to the Cost model, how should we account for this?
Normally, due to this, we will have to derecognise the remaining amount in the Rev. reserve (both OCI + OCE), right?Does it apply to all other IAS? like for intangibles too.
Thank you in advance.No, it is applied after, so i was thinking, maybe we should derecognise the amount in the Revaluation reserve, not really sure though.
I answered this last evening! Where’s it gone? Here we go again 🙁
I’m not even sure that we can chop and change like this. From cost model to fair value model and back to cost? That’s surely a change in accounting policy and it’s not as a result of compliance with law nor with a new standard. So the only acceptable justification would be to make the financial statements more reliable and no less relevant or more relevant and no less reliable.
And to keep switching like you suggest would be a tricky one to get past the auditors
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