IFRS to evaluate the value of assets

IFRS (International Financial Reporting Standards), which will be mandatory for EU-listed, Australian and certain Russian companies from 2005, makes constant reference to value: recoverable value, residual value, fair value and so on. Entities are now formally required to evaluate for all assets whether the future economic benefits expected justify the value attributed to the asset. Of course, entities were always required to consider whether the carrying value of an asset in the accounts was appropriate, but now this process will be more transparent.

IFRS (International Financial Reporting Standards), which will be mandatory for EU-listed, Australian and certain Russian companies from 2005, makes constant reference to value: recoverable value, residual value, fair value and so on. Entities are now formally required to evaluate for all assets whether the future economic benefits expected justify the value attributed to the asset. Of course, entities were always required to consider whether the carrying value of an asset in the accounts was appropriate, but now this process will be more transparent.

New transparency and communication

In the past, the basis of comparability was historical cost.

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