Effects on financial positions

All topics related to IFRS Standards.
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jomaney
Posts: 5
Joined: 08 Feb 2021, 11:48

Effects on financial positions

Post by jomaney »

I have a general questions about the fair value and cost mode.

What are the effects of each model on the financial positions?

I can just think about the depreciation expenses. Maybe someone can explain it to me or give me a big hint.

Thanks in advance.
pub_acco
Trusted Expert
Posts: 272
Joined: 19 Mar 2020, 16:40

Re: Effects on financial positions

Post by pub_acco »

Do you mean the revaluation model of PP&E? If so, if an entity revalues land purchased centuries ago, then the entity is likely to record huge revaluation surplus and as a result improve stability ratios dramatically. I've seen some jurisdictions that allowed one-time revaluation of assets aiming the similar effect.
jomaney
Posts: 5
Joined: 08 Feb 2021, 11:48

Re: Effects on financial positions

Post by jomaney »

Exactly. Thank you.
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