Asset Valuation as per IFRS / IGAAP Requirement
Reporting under IFRS would be applicable for accounting periods beginning on or after April 1, 2011. However, considering that comparatives would be required for the preceding year, entities would have to prepare an opening balance sheet as on April 1, 2010 and compile full IFRS Financial Information for the accounting period on or after April 1, 2010.
First time adoption of IFRS generally requires an entity to comply with each IFRS effective at the reporting date of its first IFRS financial statements. Previous local GAAP revaluations of Property, Plant and Equipment may be treated as deemed cost at revaluation date. The entity may also re-measure an item of Property, Plant and Equipment at fair value at the transition date and use that fair value as its deemed cost (IFRS 1.16-19). Fair values determined on a provisional basis can be adjusted against goodwill within 12 months of the acquisition date.
Impairment requirements under IFRS are more stringent than many local GAAPs, with goodwill being tested annually for impairment. Any intangible assets with in-definitive lives are also tested annually for impairment. The disclosures in relation to impairment are extensive due to the number and sensitivity of estimates and assumptions used by the management as the basis for their review.
VPL offers expert assistance in carrying out this assignment. We study the nature and type of asset(s), provide break down of various components of the asset which have a significant cost and different useful life (as compared to the main asset), provide details of the residual value, balance useful life of the asset and the components. Our services include physical verification of the Fixed Assets and tagging if required.
Even if the company decides to consider the historical value of the asset, on a provisional basis, you can utilize our expertise to study the asset, breakdown the asset into various components which have a significant cost and different life (in comparison to the main asset), estimate of balance useful life of the asset and its components and the residual value of these.