Greetings
IFRS 1 allows IFRS adopters to use the value of assets arrived through revaluation as deemed cost. However the revaluation should be on or before the transition date.
How do entities apply this option if the revaluation was not done at the date of transition to IFRS? I mean assume the entiy is adopting and producing it's first IFRS financial statements for the year ended 7 july 2019 (the transition date being 8 july 2017) how could the revaluation at the transition date be determined?
IFRS 1 Deemed Cost
Re: IFRS 1 Deemed Cost
Hi, IFRS 1 allows previous GAAP revaluation, see IFRS1.D6, IG8 , BC46-47
Re: IFRS 1 Deemed Cost
Thank you.
However in cases where the entity has no GAAP revaluations. Is there a possibility to perform the revaluation now and work back to the date of transition? Or where the entity don't have the GAAP revaluation at transition date does it mean that it can not use the deemed cost option?
However in cases where the entity has no GAAP revaluations. Is there a possibility to perform the revaluation now and work back to the date of transition? Or where the entity don't have the GAAP revaluation at transition date does it mean that it can not use the deemed cost option?
Re: IFRS 1 Deemed Cost
sure, you can do the valuation nowIs there a possibility to perform the revaluation now and work back to the date of transition?
you can also use 'cost or depreciated cost in accordance with IFRSs, adjusted to reflect, for example, changes in a general or specific price index' (IFRS 1.D6)Or where the entity don't have the GAAP revaluation at transition date does it mean that it can not use the deemed cost option?
Re: IFRS 1 Deemed Cost
Thank you. Very helpful.
But doing the valuation now and using it as deemed cost at the date of transition, how can it be?
Does it mean that taking the valuation now and adjusting it for price index between the date of the transition and now?
I am asking this because there are two years between the date of transition (8 July 2017) and now
But doing the valuation now and using it as deemed cost at the date of transition, how can it be?
Does it mean that taking the valuation now and adjusting it for price index between the date of the transition and now?
I am asking this because there are two years between the date of transition (8 July 2017) and now
Re: IFRS 1 Deemed Cost
You do the valuation now, but of course it is done as at the transition date. If it concerns real estate, for example, you need to base the valuation on real estate prices as at the transition date
Re: IFRS 1 Deemed Cost
Thank you.
This means you do the revaluation now and adjust it to apply for the transition date or use assumptions at the transition date to determine the valuation.
This means you do the revaluation now and adjust it to apply for the transition date or use assumptions at the transition date to determine the valuation.