Explain the two alternative accounting policies for the measurement of property,plant and equipment after initial recognition.

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The Answer is Subsequent to their initial recognition,AASB 116 provides entities with a choice in accounting policy between the cost model and the revaluation model (para.29).The valuation model selected must be applied to an entire class of property,plant and equipment,although alternative policies can be adopted for alternative classes.A class of property,plant and equipment is "a grouping of assets of a similar nature and use in an entity's operations" (para.37).Under the cost model,AASB 116 requires an item of property,plant and equipment to be carried,after initial recognition,at its cost less any accumulated depreciation and any accumulated impairment losses (para.30).After initial recognition,the alternative measurement model to cost is that of revaluation.When the revaluation model is adopted,AASB 116 requires an item of property,plant and equipment,after initial recognition and where fair value can be reliably measured,to be carried at a revalued amount (para.31).This revalued amount comprises the asset's fair value as at the date of the revaluation less any subsequent accumulated depreciation and accumulated impairment losses.

Explain the Two Alternative Accounting Policies for the Measurement of Property,plant