Subsequent to their initial recognition,AASB 116 provides entities with a choice in accounting policy between the:

Question

Quizplus · Accepted Answer

AASB 116 allows entities to choose between the cost model and the revaluation model when accounting for property, plant, and equipment subsequent to their initial recognition. Under the cost model, assets are carried at their original cost less any accumulated depreciation and impairment losses. Under the revaluation model, assets are carried at a revalued amount (i.e., fair value at the date of revaluation) less any subsequent accumulated depreciation and impairment losses. While the revaluation model may result in a more accurate representation of the fair value of the asset, it may also introduce additional complexity and subjectivity into the accounting process. Therefore, the choice of accounting policy will depend on the circumstances and specific needs of the entity. The cost model may be more appropriate for assets with a stable historical cost and little volatility in fair value, while the revaluation model may be more appropriate for assets with a highly volatile fair value or for entities that place a greater emphasis on fair value reporting.

Subsequent to Their Initial Recognition,AASB 116 Provides Entities with a Choice