ACCT20002 Lecture Notes - Lecture 5: Impaired Asset, Book Value, Earnings Management
7 Sep 2018
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O ce equipment: classi cation is important for disclosure and consistency in valuations, management choice between cost and revaluation model, applied on a class-by-class basis. Can choose di erent method from class to class: chosen method must be applied to all assets in that class. Ensures consistency across similar assets, limits opportunistic measurement: note: switching between methods. Revaluation back to cost - management must justify: the cost model. Para 30: after recognition as an asset, an item of ppe shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. Management makes conscious choice not to revalue ppe. Assets subject to impairment test under aasb 136: the revaluation model. Management makes conscious choice to revalue ppe. Depreciation applied based on revalued amount (reference to subsequent) Assets subject to impairment test under aasb 136 (common to both methods) Circumstances arise where fv is thought to be materially di erent to ca.
