PPE Measurement is at cost.
Cost Model – the asset is carried at it’s cost less any accumulated depreciation and any accumulated any impairment loss.
Revaluation Model – the asset is carried at revalued amount, being it’s fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Revaluation will be done every 3 – 5 years or every one year regularly.
*Regardless of model any accumulated depreciation and impairment losses recognized. In choosing the measurement is one time decision and cannot be change later.
If a revaluation results in an increase in value, it should be credited to equity under the heading “Revaluation Surplus”, unless represents reversal of previous expense.
A decrease arising as a result of revaluation should be recognized as expense to the extent of surplus.
*Realization of surplus, if asset is non-depreciable upon disposal.