Is Ifric 12 still valid?
Effective date IFRIC 12 is effective for annual periods beginning on or after 1 January 2008. Earlier application is permitted.
What is a revaluation gain in IAS 16?
[IAS 16.30] Revaluation model. The asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent depreciation and impairment, provided that fair value can be measured reliably.
What can be Capitalised under IAS 16?
IAS 16 says that we can capitalize any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management (IAS 16.16(b)).
How do you calculate revaluation surplus?
Under revaluation model, management can revalue its assets to their current market value. If there is an increase in value of asset, the difference between asset’s market value and current book value is recorded as revaluation surplus. Example: A company purchased an asset two year ago at the cost of $ 100,000.
WHO recognizes service concession asset?
grantor
(b) The grantor recognizes a liability when it grants the operator the right to earn revenue from third-party users of the service concession asset or another revenue-generating asset. Under paragraph 26 of IFRIC 12, the operator recognizes an intangible asset.
What is a service concession?
A service concession arrangement is an arrangement whereby a government or other public sector body contracts with a private operator to develop, operate and maintain an infrastructure asset such as a road, bridge, tunnel, airport, energy distribution network, prison or hospital.
Does revaluation increase profit?
If the election is made to use revaluation and a revaluation results in an increase in the carrying amount of a fixed asset, recognize the increase in other comprehensive income, as well as accumulate it in equity in an account entitled “revaluation surplus.” However, if the increase reverses a revaluation decrease for …
Can PPE be revalued?
REVALUATION OF PPE – FRS 15 POSITION FRS 15 states that, as a minimum, assets should be revalued every five years. However, if the loss is such that the carrying amount of the asset falls below depreciated historical cost, then any further losses need to be recognised in the profit and loss account.
What does IAS 16 say?
IAS 16 prescribes that an item of property, plant and equipment should be recognised (capitalised) as an asset if it is probable that the future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably.
Why is IAS 16 important?
IAS 16 establishes principles for recognising property, plant and equipment as assets, measuring their carrying amounts, and measuring the depreciation charges and impairment losses to be recognised in relation to them.
What is Ifric accounting?
IFRIC is the interpretative body of the International Accounting Standards Board (IASB) that reviews newly identified financial reporting issues not specifically addressed in IFRS or issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop, with a goal to reach a consensus on …
How are cost and revaluation models used in IAS 16?
IAS 16 set out two models for the subsequent measurement of a property, plant and equipment, the cost model and the revaluation model, an entity may apply either of these two models within its accounting policy, as long as the application of this policy is carried out by asset class.
Can a right of use asset be revalued under IAS 40?
i) the right-of-use asset is an investment property and the lessee fair values its investment property under IAS 40; or ii) the right-of-use asset relates to a class of PPE to which the lessee applies IAS 16 ’s revaluation model, in which case all right-of-use assets relating to that class of PPE can be revalued.
How is property, plant and equipment treated in IAS 16?
Overview. IAS 16 Property, Plant and Equipment outlines the accounting treatment for most types of property, plant and equipment. Property, plant and equipment is initially measured at its cost, subsequently measured either using a cost or revaluation model, and depreciated so that its depreciable amount is allocated on
When to adjust sale proceeds to fair value in IFRS 16?
[IFRS 16:100a)] If the fair value of the sale consideration does not equal the asset’s fair value, or if the lease payments are not market rates, the sales proceeds are adjusted to fair value, either by accounting for prepayments or additional financing.