Under IFRS,when an asset is revalued upwards,subsequent depreciation is based on:
A) the asset's fair value.
B) the asset's original cost.
C) the method used for determining depreciation on the company's tax returns.
D) the amount of future cash flows the asset is expected to generate.

Question

Under IFRS,when an asset is revalued upwards,subsequent depreciation is based on: 
A) the asset's fair value.
B) the asset's original cost.
C) the method used for determining depreciation on the company's tax returns.
D) the amount of future cash flows the asset is expected to generate.

Quizplus · Accepted Answer

When an asset is revalued upwards under IFRS, subsequent depreciation is based on the asset's fair value. This means that the useful life and depreciation expense of the asset will be adjusted to reflect its new fair value, which is a more accurate representation of the asset's current worth. Using the original cost or the method used for tax returns would not reflect the asset's current value, and basing future depreciation on the cash flows the asset is expected to generate would not necessarily be an accurate measure of its value.

Under IFRS,when an Asset Is Revalued Upwards,subsequent Depreciation Is Based