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I have read topics about revaluation and impairment, however, I am still a bit confused: ok, i understand impairment with Historic Cost model. But if the company uses Fair value model and revalues its assets each year, how shoul it identify impairment? For instance, if there is a change in technological environment, and fair value of our assets on the market went down, should we impair or just revalue assets?
If carried at a revalued amount they will be recognised in the accounts in the same way (an impairment loss and a revaluation decrease).The impairment loss will be debited to the revaluation reserve and shown as a loss in other comprehensive income to the extent that the asset has been revalued above what its carrying amount would have been without revaluation.If its greater than this asset should be reduced to impaired value and this excess of impairment beyond what carrying amount would have been should be recognised as an expense in the income statement.
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