Topic 2

PROPERTY, PLANT AND

EQUIPMENT (PPEs)
 Learning objectives

After studying this topic, you should be able to:

• Identify the various costs included in the initial
cost of PPEs.
• Understand the recognition and measurement of
PPEs
• Determine the carrying amount of PPES.
• Determine the depreciation and impairment
losses of PPEs
• Discuss the information of PPEs that is
presented and disclosed in financial statements.
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 Contents
1. Scope & Definitions
2. Recognition & Measurement
3. Derecognition
4. Disclosures

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 Sources of IFRS
• IAS 16 - Property, Plant and Equipment
• IAS 23 – Borrowing costs
• IAS 37 – Provisions, contingent liabilities and
contingent assets
• IAS 36- Impairment
• Amendment to IAS 16 and 38

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 Scope
IAS 16 does not apply to:
(a) property, plant and equipment classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations.
(b) biological assets related to agricultural activity other than
bearer plants (see IAS 41 Agriculture).
(c) the recognition and measurement of exploration and
evaluation assets (see IFRS 6 Exploration for and Evaluation of
Mineral Resources).
(d) mineral rights and mineral reserves such as oil, natural gas
and similar non-regenerative resources.
However, this Standard applies to property, plant and equipment
used to develop or maintain the assets described in (b)–(d).
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 Definition
Long-lived, Revenue-producing Assets

Expected to Benefit Future Periods

Tangible
Intangible
Property, Plant,
Equipment & No Physical
Investment Property Substance

Property, plant and equipment are tangible items that:

(a) are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period. (IAS 16.6)
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 Ex1: An entity owns a factory building in which
it manufactures its products.

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 Ex 2: An entity owns a building occupied by its
administrative staff.

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 Example
Ex 3 An entity (parent) holds a building to earn rentals under an
operating lease from its subsidiary. The subsidiary uses the
building as a retail outlet for its products.
In the parent’s consolidated financial statements, the building is
classified as an item of property, plant and equipment. The
consolidated financial statements present the parent and its
subsidiary as a single entity. The consolidated entity uses the
building for the supply of goods over more than one accounting
period.
In the separate financial statements of the parent, the building is
classified as an investment property and accounted for in
accordance with Section 16 Investment Property. It is a property
held to earn rentals. However, if the fair value of the investment
property cannot be measured reliably without undue cost or effort
on an ongoing basis, the parent accounts for the property as
property, plant and equipment in accordance with the requirements
of Section 17 (see paragraph 17.1).
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 Ex 4. An entity owns a fleet of motor vehicles. The
vehicles are used by the sales staff in the
performance of their duties.

Ex 5 An entity owns a motor vehicle for the exclusive

business and private use of its chief financial officer.

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 Ex 6 An entity purchases, for one combined payment,
an existing building and the remaining 80-year
interest in a 100-year right to use the land on which
the building sits (freehold ownership of land is not
possible in that jurisdiction). The building is
occupied by the entity’s administrative staff.

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 Terms
Accumulated depreciation. The total of all prior year deductions for
depreciation taken to write off the value of a fixed asset over its
estimated useful life. The accumulated depreciation account is a contra
asset account, which reduces the value of property, plant and
equipment in the statement of financial position.
Asset held for sale. A non-current asset or a group of assets (disposal
group) to be disposed of in a single transaction, together with directly
associated liabilities. Assets classified as held-for-sale are not subject
to depreciation and are carried at the lower of carrying amount and fair
value less costs to sell. Separate classification of “assets and liabilities
held for sale” in the statement of financial position is required.
Bearer plant. This is a living plant which has all of the following
characteristics: it is used to supply or produce agricultural products, it
will provide output for a period greater than one year and for which the
possibility of it being sold as agricultural produce is remote.

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 Terms

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 Terms

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 Terms

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 Recognition
An item of PPE should be recognized as an
asset only if two conditions are met:
(1) It is probable that future economic
benefits associated with this item will
flow to the entity,
(2) The cost of this item can be determined
reliably.

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 Một nhà máy hóa chất lắp đặt quy trình xử lý mới phù
hợp với yêu cầu của môi trường về SX và dự trữ SP hóa
chất độc hại; các cải tiến liên quan đến nhà máy được ghi
nhận như một TS vì thiếu quy trình này DN không thể
SX và bán SP hóa chất.

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 Note

Major spare parts & standby equipment are

recognized as PPE if they meet the definition of
PPE, failing which they are recognized as
inventories under IAS 2
(The 2011 Improvements Project amended IAS 16)

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 Measurement
Initial measurement
Estimated costs
Purchase Directly of
Cost
price attributable costs dismantlement,
removal &
restoration

These costs bring an asset into working condition

These costs are capitalized and are not to be expensed in

the period in which they are incurred.

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 Measurement
Initial measurement

Applying on or after 1
January 2022. Early
application is permitted.

Property, Plant and Equipment — Proceeds before Intended Use

(Amendments to IAS 16) amends the standard to prohibit deducting
from the cost of an item of property, plant and equipment any
proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the cost of
producing those items, in profit or loss.

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 Costs to be Capitalized
Equipment Land (not depreciable)
• Net purchase price • Purchase price
• Taxes • Real estate commissions
• Transportation costs • Attorney’s fees
• Installation costs • Title search
• Modification to building • Title transfer fees
necessary to install
equipment • Title insurance premiums
• Testing and trial runs • Removing old buildings

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 Costs to be Capitalized
Land Improvements Buildings
Separately identifiable costs of • Purchase price
• Driveways • Attorney’s fees
• Parking lots • Commissions
• Fencing • Reconditioning
• Landscaping
• Private roads

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 Decommissioning cost included in initial
measurement
The elements of cost to be incorporated in
the initial recognition of an asset are to
include the estimated costs of its eventual
dismantlement (“decommissioning costs)

Recognize the restoration costs

as a liability and a corresponding
increase in the related asset.

Record at fair value, usually the

present value of future cash
outflows associated with the
reclamation or restoration.
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 Example of Decommissioning cost
Example 1—Leased premises.
In accordance with the terms of a lease, the lessee is
obligated to remove its specialised machinery from the
leased premises prior to vacating those premises, or to
compensate the lessor accordingly. The lease imposes a
contractual obligation on the lessee to remove the asset at
the end of the asset’s useful life or upon vacating the
premises, and therefore in this situation an asset (i.e.,
deferred cost) and liability should be recognised. If the lease
is a finance lease, it is added to the asset cost; if an
operating lease (less likely), a deferred charge would be
reported.

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 Example of Decommissioning cost
Example 2—Owned premises.
The same machinery described in Example 1 is installed in a
factory that the entity owns. At the end of the useful life of the
machinery, the entity will either incur costs to dismantle and
remove the asset or will leave it idle in place. If the entity chooses
to do nothing (i.e., not remove the equipment), this would
adversely affect the fair value of the premises should the entity
choose to sell the premises on an “as is” basis. Conceptually, to
apply the matching principle in a manner consistent with Example
1, the cost of asset retirement should be recognised systematically
and rationally over the productive life of the asset and not in the
period of retirement. However, in this example there is no legal
obligation on the part of the owner of the factory and equipment to
retire the asset and, thus, a cost would not be recognised at
inception for this possible future loss of value.

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 Example of Decommissioning cost
Example 3—Promissory estoppel.
Assume the same facts as in Example 2. In this case, however,
the owner of the property sold to a third party an option to
purchase the factory, exercisable at the end of five years. In
offering the option to the third party, the owner verbally
represented that the factory would be completely vacant at the end
of the five-year option period and that all machinery, furniture and
fixtures would be removed from the premises. The property owner
would reasonably expect that the purchaser of the option relied to
the purchaser’s detriment (as evidenced by the financial sacrifice
of consideration made in exchange for the option) on the
representation that the factory would be vacant. While the legal
status of such a promise may vary depending on local custom and
law, in general this is a constructive obligation and should be
recognised as a decommissioning cost and related liability.

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 Costs incurred subsequent to purchase
or self-construction
Type of
Definition Usual Accounting Treatment
Expenditure
Repairs and Costs of day-to-day servicing to Expense in the period incurred
Maintenance maintain a given level of Benefits
Expenditure required for Capitalize and amortize over the
Regular major continuing operation of the Asset period between major Inspections
inspections
The addition of a new major Capitalize and depreciate over the
component to an existing asset remaining useful life of the original
Additions asset or its own useful life, whichever
is shorter

The replacement of Capitalize and depreciate over the

Improvements a major component useful life of the improved asset

Expenditures to restructure If expenditures are material and

an asset without addition, clearly increase future benefits,
Rearrangements replacement, or improvement capitalize and depreciate over the
future periods benefited

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 Depreciation of PPE
The costs of PPE are allocated through depreciation to the periods
that will have benefited from the use of the asset.

Depreciable Useful Systematic

amount life basic

HOW MUCH HOW LONG HOW /IN WHAT MANNER

Depreciation method
Residual Periods Number
Cost of units
value

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 Depreciation methods

Depreciation method should reflect the

pattern in which the asset’s future
economic benefits are expected to be
consumed by the entity.

Depreciation method should be

reviewed at least annually.

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 Depreciation methods

Group and
Time-based Methods composite
lStraight-line (SL) methods
lAccelerated Methods
Œ Sum-of-the-years’ digits (SYD) Tax
Diminishing balance depreciation
(Declining Balance (DB))

Depreciation method based on actual

physical use
Units-of-production method (UOP).
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 Straight-line
Cost – Residual value
Depreciation =
expense per year Years of useful life
Units-of-production method

Depreciation Cost – Residual value

expense per unit = Estimated units of useful life

Declining Balance (DB))

Depreciation per period = 2 * Straight-line rate * (Cost – Accumulated depreciation)
Sum-of-the-years’ digits (SYD)

Number of years of useful life remaining at

Estimated
Depreciation = beginning of accounting period
x Cost - Residual
per period Sum of the years’ Digits
value
Sum of the years’ Digits = n(n+1)/2
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 Group and Composite Methods
IAS 16 requires a component approach for depreciation,
where each significant component of a composite asset
with different useful lives or different patterns of
depreciation is accounted for separately for the purpose of
depreciation and accounting for subsequent expenditure
(including replacement and renewal).

Ex:
A building contains disparate components as a
building shell, a heating plant, a roof and other
discrete mechanical components.
à Allocation of costs over useful lives is based on
separate estimated lives for each component.
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 Depreciation of PPE

Residual value
Is subject to at least annual review.

Useful lives
When reviewing the depreciation method, that the
estimated life is greater or less than previously
believed, the change is treated as a change in
accounting estimate.
à The change is accounted on a prospective basis.

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 Example of estimating the useful life

An asset with a cost of €100,000 was originally estimated

to have a productive life of 10 years.
The straight-line method is used, and there was no residual
value anticipated. After 2 years, management revises its
estimate of useful life to a total of 6 years. Since the net
carrying amount of the asset is €80,000 after 2 years (=
€100,000 × 8/10), and the remaining expected life is 4
years (2 of the 6 revised total years having already
elapsed),
Each year depreciation in years 3 through 6 will be:

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 Subsequent Changes in Fair Value
Subsequent Change in Fair Value

Revaluation
Cost Model
Model

Fair value – subsequent

Cost – accumulated accumulated depreciation
depreciation – – subsequent
accumulated impairment accumulated impairment
losses loss

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 Cost Model

• Ignore all subsequent changes in

Carry at cost fair value of the assets

Allocation • Depreciation recognized every

Required period

• required when the fair values of

Disclosures its assets are materially different
from the assets’ carrying amounts

• Assets are not exempted from

Impairment impairment analysis
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 Revaluation Model
Definition of Fair value:
The price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market
participants at the measurement date.
(IFRS 13 – Fair value measurement)

For property, plant and equipment’s fair value can be

determined with reference to an active market, or it can be
estimated using an income or a depreciated replacement cost
approach.

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 Revaluation Model
All assets within a class of property, plant and equipment
must be revalued on a regular basis. Records the
difference between
(1) the book value of a revalued asset and (2) its fair value
at the end of each financial period

A revaluation surplus is
reported as other
Revaluation deficit is
comprehensive income and
accumulated in a revaluation recognized as an expense in
surplus account in equity the income statement unless
there is a balance in the
unless a revaluation deficit
revaluation surplus account
has been charged to the
income statement previously
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 Revaluation Model
Initial revaluation:
Credit to other
Increase in an comprehensive income
asset’s carrying (gain on revaluation)
amount:

Decrease in an Charge to profit or loss

asset’s carrying
amount :

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 Revaluation Model
Initial revaluation:
Example:
Assume Henan Corporation (HC) acquired a plot of land
with a cost of €100,000. After one year the land is
appraised as having a current fair value of €110,000. The
journal entry to increase the carrying amount of the land to
its fair value is as follows:

At the end of the fiscal period, the increase in the carrying

amount of the land is accumulated in the “revaluation
surplus” in the shareholders’ equity section of the
statement of financial position.
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 Revaluation Model
Subsequent revaluation:
Previous Period Net Revaluation
Net Revaluation Deficit
/ Current Period Surplus
• Balance in the
revaluation reserve is
eliminated before
Revaluation • Loss is recognized as an
charging the
Loss expense
revaluation deficit as
an expense to the
income statement
• Part of the current
revaluation gain is directly • revaluation surplus is
credited to the income reported as other
Revaluation statement, up to the total comprehensive
Gain amount of revaluation deficit income and
previously recognized as an accumulated in a
expense. revaluation reserve
• The rest is will be as per..
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 Revaluation Model
Subsequent revaluation:
Example:

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 Revaluation Model
.

Depreciation has to be recognized in the current financial

year before computing revaluation surplus or deficit

The accumulated depreciation can either be:

• Eliminated against the gross carrying amount of asset
before restating that net amount to the revalued amount
• Restated proportionally with the gross carrying amount of
the asset so that the difference between the restated
accumulated depreciation and the restated carrying
amount is equal to the revalued amount

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 Example – Accumulated depreciation
Konin Corporation owns buildings with a cost of €200,000 and
estimated useful life of five years.
Accordingly, depreciation of €40,000 per year is anticipated.
After two years, Konin obtains market information suggesting
that a current fair value of the buildings is €300,000 and decides
to write the buildings up to a fair value of €300,000. There are
two approaches to apply the revaluation model in IAS 16: the
asset and accumulated depreciation can be “grossed up” to
reflect the new fair value information, or the asset can be
restated on a “net” basis. These two approaches are illustrated
below.
For both illustrations, the net carrying amount (carrying amount
or depreciated cost) immediately prior to the revaluation is
€120,000 [€200,000 – (2× €40,000)].The net upward revaluation
is given by the difference between fair value and net carrying
amount, or €300,000 – €120,000 = €180,000.
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 Example – Accumulated depreciation
Option 1(a). Applying the “gross up” approach; since the fair
value after two years of the five year useful life have already
elapsed is found to be €300,000, the gross fair value (gross
carrying amount) calculated proportionally is 5/3 × €300,000 =
€500,000. In order to have the net carrying amount equal to the
fair value after two years, the balance in accumulated
depreciation needs to be €200,000. Consequently, the buildings
and accumulated depreciation accounts need to be restated
upward as follows: buildings up €300,000 (€500,000 – €200,000)
and accumulated depreciation €120,000 (€200,000 – €80,000).
Alternatively, this revaluation could be accomplished by restating
the buildings account and the accumulated depreciation account
so that the ratio of net carrying amount to gross carrying amount
is 60% (€120,000/€200,000) and the net carrying amount is
$300,000. New gross carrying amount is calculated
€300,000/.60 = x; x = €500,000.
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 Example – Accumulated depreciation
Option 1(a). Applying the “gross up” approach;

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 Example – Accumulated depreciation
Option 1(b). Applying the “gross up” approach where the
gross fair value had separately been valued at €450,000
then both the Buildings and Accumulated depreciation entry
would be reduced by €50,000 from the example above.

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 Example – Accumulated depreciation
Option 2. Applying the “netting” approach, Konin would
eliminate accumulated depreciation of €80,000 and then
increase the building account by €180,000 so the net
carrying amount is €300,000 (= €200,000 – €80,000 +
€180,000):

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 Revaluation Model
Derecognition
• Asset’s carrying amount, accumulated depreciation or
amortization and accumulated impairment are written off
• Any gain or loss on disposal is recognized

Realizing revaluation surplus as the

relating asset is being used
• The realized amount is the difference between (1) the
depreciation or amortization based on the revalued amount
and (2) the depreciation and amortization based on the
asset’s original historical cost
• The realized surplus is transferred directly from the assets
revaluation reserve account to the retained earnings
• It is not compulsory for companies to realized the revaluation
surplus as the relating asset is being used

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 Impairment of Value
Accounting treatment differs.

Long-term assets
to be held and used IAS 36 –
Impairment
loss

Tangible and
intangible
with finite
useful lives

Test for impairment when events or changes in circumstances

indicate that book value may not be recoverable
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 Derecognition of PPE

On disposal No future economic

benefits expected

Gain or loss

Net disposal proceeds Carrying amount

Gain or loss are included in P/L, but not as revenue

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 Dispositions
ΠUpdate depreciation to date of disposal.
 Remove original cost of asset and accumulated
depreciation from the books.
Ž The difference between book value of the asset and the
amount received is recorded as a gain or loss.

On June 30, 2013, MeLo, Inc. sold equipment for $6,350

cash. The equipment was purchased on January 1, 2008 at
a cost of $15,000. The equipment was depreciated using the
straight-line method over an estimated ten-year life with zero
salvage value. MeLo last recorded depreciation on the
equipment on December 31, 2012, its year-end.
Prepare the journal entries necessary to
record the disposition of this equipment.
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 Dispositions
ΠUpdate depreciation to date of sale.

 Remove original asset cost and accumulated depreciation.

Ž Record the gain or loss.

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 Non-Monetary (Exchange) Transactions
Non-monetary transactions where tangible
assets are exchanged for other assets,
without a cash transaction or with only a
small amount of cash “settle-up”.

A nonmonetary exchange is considered to have

commercial substance if the company:
Πexpects a change in future cash flows as a result of the
exchange, and
 that expected change is significant relative to the fair
value of the assets exchanged.
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 Exchanges
General Valuation Principle (GVP): Cost of asset acquired is:
• fair value of asset given up plus cash paid or minus cash
received or
• fair value of asset acquired, if it is more clearly evident

In the exchange of assets fair value is used except in rare

situations in which the fair value cannot be determined or
the exchange lacks commercial substance.

When fair value cannot be determined or the exchange

lacks commercial substance, the asset(s) acquired are
valued at the net book value of the asset(s) given up, plus
(or minus) any cash exchanged. No gain is recognized.
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 Example
Matrix, Inc. exchanged new equipment and $10,000 cash
for equipment owned by Float, Inc.
Below is information about the asset exchanged by Matrix.
Record the transaction assuming the exchange has
commercial substance.

Accumulated Book Fair

Cost Depreciation Value Value
Matrix's
Equipment $ 500,000 $ 300,000 $ 200,000 $ 205,000

Gain = Fair Value – Book Value

Gain =
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 Example
Record the same transaction assuming the
exchange commercial substance.

Record the same transaction assuming the

exchange lacks commercial substance.

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 Self-Constructed Assets
When self-constructing an asset, two accounting issues must
be addressed:
Πoverhead allocation to the self-constructed asset.
• incremental overhead only
• full-cost approach
 proper treatment of interest incurred during construction

Under certain conditions, borrowing costs

incurred on qualifying assets is capitalized.

Asset that necessarily Interest and other costs that are incurred
takes a substantial period in connection with the borrowing of funds
of time to get ready for its that are directly attributable to the
intended use. acquisition, construction or production of
the qualifying asset
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 Borrowing Cost Capitalization
ISA 23 –
Borrowing costs

Capitalization begins when:

• construction begins
• Borrowing cost is incurred, and
• qualifying expenses are incurred.
Capitalization ends when:
• the asset is substantially complete and
ready for its intended use, or
• when borrowing costs no longer are being
incurred.

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 Borrowing Cost Capitalization
General borrowings
• Entity uses funds borrowed generally to fund the acquisition or
production of the qualifying asset

Specific borrowings
• Entity uses funds borrowed specifically for the purpose of
purchasing or producing the qualifying asset
• Specific borrowing cost = actual borrowing costs incurred –
investment income (earned on temporary investment of
surplus specific borrowings)

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 Interest Capitalization
Borrowing Cost is capitalized based on
Average Accumulated Expenditures (AAE).

Qualifying expenditures (construction labor, material, and

overhead) weighted for the number of months outstanding
during the current accounting period.

If the qualifying asset is If there is no specific new

financed through a borrowing, and the
specific new borrowing company has other debt

. . . use the specific rate . . . use the weighted

of the new borrowing as average cost of other debt
the capitalization rate. as the capitalization rate.
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 Interest Capitalization
Welling, Inc. is constructing a building for its own use.
Construction activities started on May 1 and have continued
through Dec. 31. Welling made the following qualifying
expenditures: May 1, $125,000; July 31, $160,000, Oct. 1,
$200,000; and Dec. 1, $300,000. Welling borrowed $1,000,000
on May 1, from Bub’s Bank for 10 years at 10 percent to
finance the construction. The loan is related to the construction
project and the company uses the specific interest method to
compute the amount of interest to capitalize.
Average Accumulated Expenditures
Fraction of
Construction
Date Expenditure Period AAE
5/1 $ 125,000 8/8 $ 125,000
7/31 160,000 5/8 100,000
10/1 200,000 3/8 75,000
12/1 300,000 1/8 37,500
$ 785,000 $ 337,500
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 Interest Capitalization

Since the $1,000,000 of specific borrowing is sufficient to

cover the $337,500 of average accumulated expenditures
for the year, use the specific borrowing rate of 10 percent to
determine the amount of interest to capitalize.

Interest = AAE × Specific Borrowing Rate × Time

Interest = $337,500 × 10% × 8/12 = $22,500

The loan, initiated on May 1, is

outstanding for 8 months of the year.

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 Interest Capitalization

If Welling had not borrowed specifically for this construction

project, it would have used the weighted-average interest
method. The weighted average interest rate on other debt
would have been used to compute the amount of interest to
capitalize. For example, if the weighted-average interest
rate on other debt is 12 percent, the amount of interest
capitalized would be:

Interest = AAE × Weighted-average Rate × Time

Interest = $337,500 × 12% × 8/12 = $27,000

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 Interest Capitalization

If specific new borrowing had been insufficient to

cover the average accumulated expenditures . . .

. . . Capitalize this
portion using the 12 Other
percent weighted- debt
average cost of debt.
. . . Capitalize this AAE Specific
portion using the 10 new
percent specific borrowing
borrowing rate.
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 Disclosures
For each class of tangible asset, disclosure is required of:
1. The measurement basis used (cost or revaluation
approaches).
2. The depreciation method(s) used.
3. Useful lives or depreciation rates used.
4. The gross carrying amounts and accumulated depreciation
at the beginning and at the end of the period.
5. A reconciliation of the carrying amount from the beginning to
the end of the period, showing additions, disposals and/or
assets included in disposal groups or classified as held-for-
sale, acquisitions by means of business combinations,
increases or decreases resulting from revaluations,
reductions to recognised impairments, depreciation, the net
effect of translation of foreign entities’ financial statements
and any other material items.
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 Disclosures
In addition, the financial statements should also disclose
the following facts:
1. Any restrictions on titles and any assets pledged as security
for debt.
2. The accounting policy regarding restoration costs for items of
property, plant and equipment.
3. The expenditures made for property, plant and equipment,
including any construction in progress.
4. The amount of outstanding commitments for property, plant
and equipment acquisitions.
5. The amount received from any third parties as compensation
for any impaired, lost or given-up asset. This is only
applicable if the amount received was not separately
disclosed in the statement of comprehensive income.

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Disclosures
 Example : Cost model

1) 1/1/20X1- purchase of an asset:

Purchase price €20.000
useful life 5 years
Depreciation: 5 years
Residual Value at 20x5 = €0
2) At 1/1/20x3 value resulting from
impairment test: € 6.300

Depreciations Schedule and effect of impairment

test according to cost model

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 Example : cost model
Year’s Carrying P/L €
end amount
1.1.20X1 depreciation

1.1.20X2 Depreciation

1.1.20X3 Loss

Depreciation
1.1.20X4 Depreciation

1.1.20X5 Depreciation

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 Example : Revaluation model
Year X1 Purchase price € 100.000
Useful life: 5 years
Residual value after 5 years: €0
Year’s end Fair value
X1 95.000
X2 75.000
X3 40.000
X4 12.000
X5 0

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 Example : Revaluation model

Year X1

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 Example : Revaluation model

Year X2

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 Example : Revaluation model

Year X3

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 Example : Revaluation model

Year X4

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 Example : Revaluation model

Year X5

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 Example : Revaluation model

Year Asset Depreciation Net Fair Equity

Book value
Value
X1
X2
X3
X4
X5

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End of Topic 2