If a Company Chooses the Revaluation Model Permitted in IAS

question 3

Multiple Choice

If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:

• A) annual revaluations must be performed on each class of assets.
• B) it must update the valuation so that the balance sheet represents fair value on the balance sheet date.
• C) appraisals must be performed by an official of the IASB.
• D) the depreciated replacement cost must be used as the fair value of the fixed asset.

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Definitions:

Banking

The business conducted or services offered by a bank, including deposits, loans, and currency exchange.

Interest Rate

The ratio of a loan that represents interest expenses to the borrower, typically articulated as an annual percentage of the loan yet to be repaid.

Selling Price

The price at which an item or service is sold to buyers.

Face Value

The nominal or stated value of a security or coin, as printed or stamped on the face of it, and not necessarily its market value.