Subsequent to the initial recognition of an asset an entity has a choice on the measurement basis to be adopted. The choice is between:

Question

Quizplus · Accepted Answer

The two measurement bases available to entities subsequent to initial recognition of an asset are cost and revaluation. Cost is the amount paid or payable to acquire an asset and includes all costs necessary to bring the asset to its present location and condition. Revaluation is the fair value of an asset at the date of revaluation less any subsequent accumulated depreciation and impairment losses. The choice of measurement basis will depend on the nature of the asset and the reporting requirements of the entity. However, cost is the default measurement basis and revaluation can only be used if certain conditions are met.

Subsequent to the Initial Recognition of an Asset an Entity