REVALUATION

Revaluation Model
 The revalued amount is the fair value at the date of the
revaluation less any subsequent accumulated depreciation and
subsequent accumulated impairment losses.

FREQUENCY OF REVALUATION
PPE WITH SIGNIFICANT & ANNUAL REVALUATION
VOLATILE CHANGES IN FAIR
VALUE
PPE WITH INSIGNIFICANT IN FAIR THREE TO FIVE YEARS REVALUATION
VALUE
 BASIS OF REVALUATION
 FAIR VALUE – PRICE THAT WOULD BE RECEIVED TO SELL AN ASSET IN
AN ORDERLY TRANSACTION BETWEEN MARKET PARTICIPANTS AT THE
MEASUREMENT DATE

 DEPRECIATED REPLACEMENT COST (SOUND VALUE) – REPLACEMENT

COST OR CURRENT PURCHASE PRICE OF THE ASSET MINUS THE
CORRESPONDING ACCUMULATED DEPRECIATION
 DEFINITION OF TERMS
 CARRYING AMOUNT – HISTORICAL MINUS THE CORRESPONDING
ACCUMULATED DEPRECIATION
 APPRECIATION/REVALUATION INCREASE – EXCESS OF THE
REPLACEMENT COST OVER THE HISTORICAL COST
 NET APPRECIATION – APPRECIATION MINUS CORRESPONDING
ACCUMULATED DEPRECIATION
 REVALUATION SURPLUS/INCREMENT – FAIR VALUE OR
DEPRECIATED REPLACEMENT COST OR SOUND VALUE MINUS THE CARRYING
AMOUNT OF THE PROPERTY, PLANT AND EQUIPMENT
 APPROACHES IN RECORDING THE
REVALUATION
 PROPORTIONAL APPROACH – ACCUMULATED DEPRECIATION AT THE
DATE OF REVALUATION IS RESTATED PROPORTIONATELY WITH THE
CHANGE IN THE GROSS CARRYING AMOUNT OF THE ASSET SO THAT THE
CARRYING AMOUNT OF THE ASSET AFTER REVALUATION EQUALS THE
REVALUED AMOUNT.

 ELIMINATION APPROACH – ACCUMULATED DEPRECIATION IS

ELIMINATED AGAINST THEH GROSS CARRYING AMOUNT OF THE ASSET
AND THE NET AMOUNT RESTATED TO THE REVALUED AMOUNT OF THE
ASSET.
 REVERSAL OF A REVALUATION
SURPLUS
 A REVALUATION DECREASE SHALL BE CHARGED DIRECTLY AGAINST ANY
REVALUATION SURPLUS TO THE EXTENT THAT THE DECREASE IS A REVERSAL
OF A PREVIOUS REVALUATION AND THE BALANCE IS CHARGED TO EXPENSE.

SALE OF REVALUED ASSET

 WHEN A REVALUED ASSET IS SOLD, ALL ACCOUNTS RELATING THERETO SHALL
BE CLOSED. THE DIFFERENCE BETWEEN THE SALE PRICE AND THE CARRYING
AMOUNT OF THE REVALUED ASSET IS RECOGNNIZED AS GAIN OR LOSS ON THE
SALE.
 DISCLOSURES RELATED TO
REVALUATION
 The effective date of revaluation.
 Whether an independent value was involved.
 Method and assumptions applied in estimating fair value.
 Whether the fair value was determined directly by reference to observable prices in an
active market or recent market transactions using other valuation technique.
 Historical cost and carrying amount of each class of revalued property, plant and
equipment
 Revaluation surplus, indicating the movement for the period and any restrictions on
the distribution of the balance to shareholders
Thank you
BY YOURS TRULY,

LOUIE JIM D. PIALDA, CPA