Is your company ready for FRS 102? Tangible Fixed Assets


Part 2- Tangible Fixed Assets

Under GAAP a tangible fixed asset could be valued by historical cost or on a revaluation basis.

Under FRS 102, tangible assets can continue to be measured under the cost or revaluation model. Arguably the most significant change for Tangible Fixed Assets under FRS 102 will be that the revaluation model can be applied to individual items within a class rather than applying the revaluation to the entire class.

FRS 102 now explicitly makes a link between Tangible Fixed Asset and the need for future economic benefits. If it is probable (generally taken to mean more likely than not) that future economic benefits will flow to the entity then this criteria will be met.

FRS 102 removes the requirement of an independent valuation every 5 years and an interim valuation every 3 years. Instead, it requires revaluations to be carried out with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at the year end. This gives the company more choice as to when they value their assets.

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