Significant changes in financial reporting requirements have transformed the fixed asset accounting framework of companies.
- Under U.S. GAAP, fixed assets are recorded at acquisition cost and are then depreciated to a disposal or residual value. If there are certain indicators that the realizable value of the fixed asset has negatively changed, then the asset is written down and a loss is recorded. This is referred to as impairment.
- Under IFRS, financial statement issuers have the option to choose either the cost model (which is in most respects similar to the U.S.GAAP model) or the revaluation model (for which there is no parallel reporting under
U.S.GAAP). Under the revaluation model, fixed assets may be periodically written up to reflect fair market value.
To accommodate the revaluation mode, Fixed Asset Connect allows user to enter a new value to applied to the specific fixed asset.
To enter a new value, click on “Action” button in Fixed Assets list, and select “Revaluate”. Enter the new value and click “Revaluate Asset” button.