Discuss the rationale for the accounting treatment of gain

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IAS 16/MFRS 116 Property, plant and equipment allows entities to choose between the cost and revaluation model in the subsequent measurement of their property, plant and equipment. On the other hand, IAS 40/MFRS 140 Investment property allows entities to choose between cost and fair value model in the subsequent measurement of their investment properties

Problem 1: Explain the difference between the revaluation model in IAS 16/MFRS 116 Property, plant and equipment and the fair value model in IAS 40/MFRS 140 Investment property. Discuss the rationale for the accounting treatment of gain or loss on revaluation in each method.

Reference no: EM132968662

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