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.
Effects on financial positions
Re: Effects on financial positions
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.
Re: Effects on financial positions
Exactly. Thank you.