International Financial Reporting Standards (ifrs)

Land and buildings

• They are separate assets;
• Even though they can be acquired together, they are accounted for separately;
• An increase in the value of the land on which a building stands does not effect on the depreciation amount of that building;

• Unit 2

Asset measurement after recognition

• An entity shall choose either the cost model or the revaluation model as its accounting policy;
• The chosen policy is then applied to an entire class of property, plant and equipment;

• Unit 2

Cost model

• After recognition as an asset, an item of property, plant and equipment shall be carried as its cost less any accumulated depreciation;

• Unit 2

Revaluation model

• A plant, property and equipment is carried is carried at a revalued amount, being its fair value at the date of the revaluation less any accumulated depreciation;
• Revaluations are done with sufficient regularity;

• Unit 2