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+--- Thread: Fully depreciated assets (/showthread.php?tid=6408)
Fully depreciated assets - KKashif - 08-19-2009
Can anyone tell me if fully written off assets can be revalued again if they are still in use i mean beyond their ordinary useful life ?
Thanks
- wsafca - 08-19-2009
I think, it depends upon the management intent to use revaluation model or the cost model.
I would like to mention one which might be relevent that..
If management intends to revalue one asset, it has to apply the revaluation to all of the assets in that category. i.e if one furniture item, then all future items and so and so forth.
Regards
Waqas Shabbir
- shahid amin - 08-26-2009
Fully depreciated assets are those assets which are totally depriciated within one accounting period.
According to my point of view these assets assume zero solvage value and not mentioned in balance sheet.
- umairahmed-1 - 09-09-2009
In diminishing balance method, this situation will not occur frequently.
Any way, it depends on the company policy regarding measurement of property, plant and equipment (tangible fixed property, plant and equipments) i.e. revaluation or cost model.
If the company is using cost model then the property, plant and equipment shall be shown in the balance sheet at zero value. i.e. cost less accumulated depreciation <u>because according to IAS-16 "The carrying amount of an item of property, plant and equipment shall be derecognized
(a) on disposal; or
(b) when no future economic benefits are expected from its use or disposal."</u>
But this situation should be solved by revising the estimate of useful life of property, plant and equipment, (if it is still in use) before the value of property, plant and equipment reaches zero.
Fully depreciated property, plant and equipment can be revalued. But for that purpose, the company must change its policy from cost model to revaluation model and if an item of property, plant and equipment is revalued, the entire class of property, plant and equipment to which that asset belongs shall be revalued.
I hope this serves the purpose.