IFRS permits companies to carry assets at historical cost or use a revaluation model for fixed assets. According to IAS 16, if revaluation is used:1. it must be applied to all assets in a class of assets.2. assets must be revalued on an annual basis.3. assets must be depreciated on the straight-line basis.4. salvage values must be zero.

Question

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According to IAS 16, if revaluation is used, it must be applied to all assets in a class of assets and assets must be revalued on an annual basis. However, the choice of depreciation method (straight-line, reducing balance, etc.) and salvage value is not restricted by the use of the revaluation model. Therefore, statement 3 and 4 are incorrect.

IFRS Permits Companies to Carry Assets at Historical Cost or Use