International accounting standards require companies to revalue their property,plant,and equipment to reflect fair market values.

Question

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International accounting standards do not require companies to revalue their property, plant, and equipment to reflect fair market values. Instead, they allow companies to choose between two methods of accounting for these assets: cost model and revaluation model. In the cost model, the assets are recorded at their original cost less accumulated depreciation, while in the revaluation model, the assets are revalued to fair value less any subsequent depreciation or impairment. However, the revaluation model is optional and can be used only for certain classes of assets, such as real estate or intangible assets with a readily determinable fair value.

International Accounting Standards Require Companies to Revalue Their Property,plant,and Equipment