Accounting · IAS 16 Property, Plant and Equipment
An entity applies the revaluation model to its property, plant and equipment. One asset has increased in value and a revaluation surplus has been recognized in other comprehensive income. How should future depreciation on this asset be treated?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Depreciation is charged only if the asset's fair value subsequently decreases
- 2Depreciation is no longer charged on revalued assets
- 3Depreciation must be based on the revalued amount of the asset✓
- 4Depreciation must continue to be based on the historical cost only
Correct answer
Depreciation must be based on the revalued amount of the asset
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