To mark this momentous year for UK GAAP, I'm embarking on a mission to work my way through FRS 102, reading a portion on each working day of 2015 and writing a short blog entry on my thoughts and musings (be they few or many).
Day 75 (3 July)
A quick post today, as I am in central London attending a training course today. It's pretty weird being a participant rather than a lecturer! I can see why we get so many comments on our feedback forms about the supreme importance of quality biscuits.
Yesterday, I discussed the revaluation model for PPE which is based on market value (that being, for a property, the application of the fair value rules in section 11). That is, unless the property is highly specialised and is rarely sold except as part of a continuing business. In this case, income-based valuation or depreciated replacement cost could be used as a better measure (para 17.15D).
Note that the model for reflecting revaluation gains and losses is pretty much the same as FRS 15 for PPE - in stark contrast to that for investment properties, which as we saw a few posts ago, is taken to P&L. For PPE, the movements go to Other Comprehensive Income ('OCI') - which is broadly the equivalent of the Statement of Total Recognised Gains and Losses in FRS 3 - unless there is a revaluation decrease that wipes out any previous gains in which case the excess loss goes to P&L (as does any reversal of this). In terms of the balance sheet, the good old revaluation reserve from company law still serves us well.
Have a good weekend everyone! Let's hope we don't melt before Monday.
P.S. If you missed the last instalment click here