PPE and IFRS

Question 1

Major Differences:

Answer 1

US GAAP- no annual review, IFRS annual review

US GAAP- No component depreciation
IFRS- Component depreciation

US GAAP- No revaluation
IFRS- Revaluation

Question 2

Types of Questions:

Answer 2

• Component Depreciation
• Application of adjusting an asset to fair value
• identification of costs to be capitalized (No differences between US GAAP and IFRS)

Question 3

Under the revaluation model, can you mark an assets FV above the original purchase price!

Answer 3

Yes, you can go above the original purchase price of the asset.

Question 4

If a company uses the revaluation model and an expense for a decrease in FV was taken in year 1, how would an increase above the original carrying value be recorded?

Answer 4

• the value of the asset can be recorded above the original carrying value.
• The gain is limited to the amount of expense that was taken previously.
• The difference will go to other comprehensive income