An entity is applying the revaluation option for some items of property, plant and equipment. Can it use a valuation as of a date other than the date of transition?
An enterprise with a calendar year end adopting accounting standards for private enterprises in 2010 would have a date of transition of January 1, 2009. Revaluing an item(s) of property, plant or equipment on adoption would mean that the value must be established as of January 1, 2009. The date of the valuation itself is not critical provided that it appropriately reflects the fair value of the asset at the transition date. An enterprise could not, for example, use a valuation as of some other date unless it could establish that the valuation on that date is not materially different from that on the date of transition.
Related Questions
- How does an entity measure the fair value of a tangible asset (such as property, plant and equipment) that does not have an observable market price or directly identifiable cash flows?
- What are the accounting consequences of revaluing property, plant and equipment on adopting accounting standards for private enterprises?
- What happens if, as a result of revaluing property, plant or equipment, the estimated useful life of the asset changes?