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ty0311
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Hi Chris,
Understood that if we are to classify a NCA that adopts the revaluation model to be “held for sale”, we would need to revalue the NCA immediately prior to the reclassification, following the accounting treatments under IAS 16. The value then gets reported as the “held for sale” will then be the fair value.
I want to ask what happens if the revaluation model adopted for this NCA (so before the re-classification) was not based on fair value but was based on the value-in-use (DCF) concept?
As the value of the NCA based on value-in-use may not tie with the fair value of the asset, does this mean I will need to do 2 revaluations (one based on fair value, and the other based on value-in-use) so the NCA “held for sale” will use the Lower of the 2?Thanks again!
Regards,
Tim
P2-D2
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Hi Tim,
Great to hear from you and you’re making good progress through the notes/videos.
If the NCA-HFS is held under the revaluation model then it will be held at FV less costs to sell on reclassification as a NCA-HFS, it wouldn’t be just the FV.
On your other point, would we use value-in-use as the revaluation model? I doubt that we would and fair value would be the method used.
Thanks
ty0311
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