In this model the revaluations need to be on a regular basis so that the carrying value of the asset does not differ materially from the fair value of the asset due to time lag in the calculation.
If the asset is revalued then revaluation of all the assets belonging to that class should be done. Revalued assets depreciation will be done in the same manner as done in the historical costing.
In the event that the revalued assets value increases then the increase should be added to comprehensive income and also to accumulated equity. In accumulated it should be kept under heading revaluation surplus.
However if the revaluation increase represents the reversal of the revaluation done for the same in the history and was recognized as loss or expense in the income statement then it should be recorded as the profit or loss.
If the revaluation results into decrease of the asset value then it should be recognized as an expense in the income and loss statement. This amount be in excess of the amount recognized as surplus in the equity (Georgiou & Jack, 2011).
If assets which is being revalued is disposed by the firm then the surplus should be directly transferred to retained earnings or can be kept in the revaluation surplus. Under no circumstance it should come into retained equity by the means of profit and loss statement.
Measurement of Intangibles through fair value accounting is to be done through IAS 38. The assets which under its scope are financial assets, exploration assets, expenses done by the firm in the development, extraction of the natural resources, intangible assets and other assets like assets held for sale, assets which arise due to providing benefits to employees.
For the initial recognition firm should choose cost model or the model used for revaluation for the respective class of asset.
The revaluation follows the same principle as PPE. if the revaluation increase represents the reversal of the revaluation done for the same in the history and was recognized as loss or expense in the income statement then it should be recorded as the profit or loss.